Overview:
USD/CAD is consolidating in higher range after hitting near-two-month low of 0.9821 on Thursday. The rate is underpinned by higher risk aversion; weaker commodity and oil prices (Nymex crude settled down 88 cents Thursday at $85.89/bbl); profit-taking on CAD-longs before weekend. But USD/CAD gains tempered by weaker USD sentiment; sovereign demand for CAD.
Data focus:
13:30 GMT Canada October monthly survey of manufacturing.
Preference:
Sell below 0.9855 with targets 0.982 and 0.9805 in extension.
Support Levels:
S1 - 0.9821 (Thursday's low)
S2 - 0.9805
S3 - 0.9793 (61.8% retracement of advance from Aug. 14 low of 0.9630 to Nov. 16 high of 1.0056)
Alternative scenario:
Buy above 0.9855. Above 0.9855 look for further upside with 0.9875 and 0.9895 as targets.
Resistance Levels:
R1 - 0.9879(Tuesday's high)
R2 - 0.9895
R3 - 0.9931-0.9941 band (Dec. 7 high-Dec. 5 high)
Technical Comment:
As long as 0.9855 is resistance, it is likely to see decline to 0.982. Daily chart is mixed as MACD is bearish, 5- & 15-day moving averages are falling; but stochastic is bullish at oversold.