Technical Bias: Bearish
- USDCAD dips 0.6% to 1.2000.
- ADP says US private sector employers added just 169,000 jobs in April vs. expectations for 200,000.
- Long-term bullish bias on USDCAD still stands.
The USDCAD continued to slide on Wednesday, falling for a third consecutive day amid signs the US labour market was cooling at the start of the second quarter.
The USDCAD found at a bottom at 1.1984 in Wednesday’s New York session. It would subsequently consolidate at 1.2000, declining 0.6 percent. The pair is testing the 1.1998 support line and a break below that level would lead to a re-test of 1.1978, the low from mid-January. On the upside, the 1.2100 level is likely to contain any breakout attempt.
The USDCAD backtracked immediately after ADP said US private sector employment increased by only 169,000 last month, far less than the projected gain of 200,000. On Friday the Labor Department is expected to announce the creation of more than 200,000 jobs in April.
Long-Term Bullishness Stands
The USDCAD is trading near fair market value, as rising oil prices and an optimistic Bank of Canada have supported the loonie in recent weeks. Long-term, the pair is still primed for a breakout, as the prospects of a US dollar rebound remain intact.
USD Continues to Soften
The US dollar weakened across the board on Wednesday, losing ground against a basket of currencies. The dollar index fell 0.7 percent to 94.41 after mounting a three-day comeback.