USDCAD is down modestly after the Canadian dollar paired back losses following a less than expected gross domestic product figure, .1 percent increase opposed to expectations of .2 percent. The sluggish Canadian economy is halting any expectations of the Bank of Canada (BoC) increasing interest rates. However, the downtrend in the US dollar is adding to the strength in the loonie despite slow growth. Canadian service industries expanded in April, while key production of goods, such as energy, fell.
USDCAD is oversold on the daily chart, but the strength in the prevailing downtrend remains intact with the ADX pushing through 30 without any pullback. However, the – DMI is pulling back, which could signal a slight retracement with key areas of resistance at 1.0700, and potentially, but less likely near-term, 1.0765. Support at 1.0665 is being tested, and a close lower with only strengthen the move lower to 1.0600 after the oversold condition is shaken.
There is a 20/200 EMA bearish crossover in the works, and a close below current support will help pull the 20 EMA lower.