USD/CAD falters at first attempt to firmly break above the 1.34 handle
USD/CAD continues to rise after the poor Bank of Canada business outlook survey for Q1 in overnight trading
The pair reached a high of 1.3403 and tested resistance from the 5 April high at the similar level, before retreating now to near 1.3390. Near-term price bias is still more bullish as buyers broke above the key hourly moving averages in overnight trading following the release of the BOC Q1 business outlook survey.
They are keeping the momentum going in the new day as price is now challenging a break of the 1.3400 handle but for the time being, buyers are lacking a follow through.
Looking at the bigger picture:
The upside bias in the pair remains very much intact as price holds above the 100-day MA (red line) as well. Daily resistance is seen around 1.3384 but a firm break above 1.3400 will help allow buyers to extend the upside move to test resistance near 1.3445-50 next.
For me, the key level in USD/CAD is the trendline support stemming from February last year. It has helped to act as a key support for the pair twice already this year and as long as that level holds, buyers will have a safety net to search for further moves higher in the pair.
Adam made a good point recently in that Canadian economic data has been surprising to the upside to begin Q1 2019. However, the falloff in recent weeks has been rather stark and at this rate, it looks be leading towards a rate cut by the Bank of Canada.
If something (the loonie) can't rally on good news, then it's going to be a tough road ahead when headlines start turning against it over the next few months.