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USD/CAD drops to lows sub-1.0840

FXStreet (Edinburgh) - The greenback is unable to pick up further pace against the Canadian dollar on Thursday, dragging the USD/CAD to test fresh intraday lows in the 1.0840 neighbourhood.

USD/CAD softer post-US docket

The pair trades on the defensive camp now, extending the drop from session peaks beyond 1.0860 to current lows in the vicinity of 1.0840. The renewed weakness around the USD comes despite the US economy expanded 4.2% YoY in the second quarter, surpassing forecasts. In the same direction, Initial Claims dropped to 298K in the week ending on August 22, a tad lower than the 300K forecasted. The Canadian docket showed a narrower current account deficit in Q2, reaching $11.87 billion vs. $12.39 billion from the previous quarter. “We remain bullish and prefer to look for opportunities to buy USDCAD. Price action early in the session here again looks constructive and the 200-day MA (1.0837) has held the downside again. But we have to concede that the charts are turning against the USDCAD at the moment; this will raise the risk of more softness below 1.0850 unless there is a swift recovery in spot in the course of the next week or so”, observed Shaun Osborne, Chief FX Strategist at TD Securities.

USD/CAD levels to watch

The pair is now losing 0.20% at 1.0840 with the immediate support at 1.0829 (low Aug.27) ahead of 1.0796 (low Jul.29) and then 1.0764 (61.8% of 1.0620-1.0998). On the upside, a break above 1.0887 (200-d MA) would target 1.0924 (10-d MA) en route to 1.0956 (high Aug.27).

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