Overview:
USD/CAD is consolidating after hitting five-week low of 1.0142 on Thursday. Canada's markets are shut today for Good Friday holiday. USD/CAD is undermined by higher-than-expected 0.2% growth in Canada's January GDP (vs. +0.1% forecast); much stronger-than-expected 1.4% rise in Canadian producer prices in February for largest monthly gain since June 2008 (vs. +0.5% forecast); firmer oil prices (Nymex crude settled up 65 cents Thursday at $97.23/bbl); improved risk appetite. But USD/CAD downside is limited by positions adjustment before weekend. Daily chart is still negative-biased as MACD and stochastics are bearish, although latter is at oversold; five-day moving average is below 15-day MA and declining.
Recommendation:
Sell below 1.02 with downside targets at 1.0142 and 1.011.
Support levels:
S1 - 1.0142 (Thursday's low)
S2 - 1.0111-1.0103 band (Feb. 20 low-Feb. 19 low)
S3 - 1.0058 (Feb. 18 low).
Alternative scenario:
Buy above 1.02 with upside targets at 1.022 and 1.0235.
Resistance levels:
R1 - 1.0221 (Tuesday's high)
R2 - 1.0235 (Monday's high)
R3 - 1.0265 (March 21 high)
