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USD/CAD consolidates near monthly lows

  • CAD remains strong after last week data. 
  • Key data ahead: BoC and US jobs data.  

The USD/CAD pair is about to end Monday little changed as it remains near November lows. It is waiting for the Bank of Canada’s meeting near a critical technical level. 

On Friday, the pair dropped sharply after the release of Canadian data: GDP and jobs numbers came in above expectations and triggered a rally of the loonie across the board. The numbers reinforced rate hike speculation for next year. 

USD/CAD lost more than 200 pips on Friday and today it reached a fresh low at 1.2655 before rebounding back to the 1.2700 area, where it was trading near the end of the session. The pair was rejected from below 1.2660 but the rebound was limited, showing that the bearish pressure still persists. 

The pair holds near a critical level ahead of Wednesday’s Bank of Canada decision. In the US, the key numbers will be from the labor market: on Wednesday the ADP report and on Friday NFP. 

Technical levels 

To the upside, the FXStreet's technical confluence indicator identifies resistance areas at 1.2745, 1.2760 and 1.2775. On the flip side, the immediate support is seen around 1.2665 that is a key support that capped the downside during the previous four weeks. A consolidation below could open the doors to more losses. Support levels below might lie at 1.2645 and 1.2595 (Oct 6 low). 

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