USDCAD bounces from dangerous zone on upbeat US data
The pair accelerated sharply higher as the greenback was strongly boosted by upbeat US data.
US new home sales unexpectedly rose in October (6.2% / 685K vs -6.0% / 625K forecast) hitting the highest level since October 2007.
Fresh rally moves away from dangerous zone at 1.2665/70 (lows of 10 Nov / 23 Nov) which mark the breakpoint for bears from 1.2916 (27 Oct high).
Higher base is forming here but break above next strong barriers at 1.2750 zone (4-hr cloud base / converging 10/20SMA’s) is needed to confirm and open way for further recovery.
Further recovery would then open next pivot at 1.2783 (4-hr cloud top).
Lower oil prices would be also supportive for further weakness of the loonie.
Conversely, recovery rejection under 10/20SMA’s would signal extended consolidation and keep the downside at risk.
Res: 1.2750; 1.2761; 1.2791; 1.2820
Sup: 1.2680; 1.2665; 1.2628; 1.2598