The pair fell back to 1.28 zone on better than expected Canada’s Manufacturing sales (Mar 1.4% vs 1.2% f/c) and strong fall in US housing starts (Apr -3.7% vs -0.7% f/c and upward-revised March figure from 1.9% to 3.6%).

Fresh weakness commenced after three-day rally stalled at 1.2924 and tested top of narrowing daily cloud (1.2810) so far.

Cloud twists next week (1.2765) and may attract for further weakness, with return below converged 10/20/55SMA and 14-d momentum breaking into negative territory, supporting the notion. Return into daily cloud and close below 1.2803 (Fibo 61.8% of 1.2729/1.2924 recovery leg) would generate fresh bearish signal and risk deeper fall.

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Next support lays at 1.2766 (30SMA) ahead of key near-term support at 1.2729 (11 May trough), loss of which would confirm reversal on completion of daily failure swing pattern.

Res: 1.2833; 1.2844; 1.2876; 1.2924
Sup: 1.2803; 1.2766; 1.2729; 1.2706


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