USD/CAD jumps to six-day highs above 1.2850
- Canadian dollar among worst performers of the American session.
- US and Canadian bonds rise sharply.
- USD/CAD rises to the highest level since last Wednesday.
The USD/CAD broke to the upside after moving in a small range for hours and jumped to 1.2872, reaching the highest level since last Thursday. The pair remains near the highs, with the bullish momentum intact.
Weaker loonie, USD/CAD rebounds from weekly lows
The loonie dropped across the board during the American session amid risk aversion. It also lost ground versus AUD and NZD. The Dow Jones is falling 1.40% and the Nasdaq 3.40%. US and Canadian yields are falling, currently at multi-day lows.
The slide in equity prices offered some support to the dollar that was affected by weaker than expected US economic data. The S&P Global PMI came in below expectations. The S&P Global Composite dropped in May to the lowest in five months according to preliminary data at 53.8, down from 56 and below the 55.5 of market consensus. New home Sales fell 16.6% in April, worse than expectations. On Wednesday, the FOMC minutes will be released. In Canada, the next important economic report is due on Thursday with retail sales.
Resistance ahead at 1.2890
The USD/CAD is turning to the upside, bouncing from the lowest in two weeks. The pair found support above 1.2760 and now is looking to test the 1.2890 area. A consolidation above 1.2900 should strengthen the outlook for the dollar.
On the flip side, 1.2815/20 is the key support. If USD/CAD falls below, the recent low at 1.2764 would be exposed. Below the next support stands at 1.2714 (May 5 low).
Technical levels