An abundance of global data on Wednesday 6th May but from the US, ADP Non-Farm Employment Change will be a key focus ahead of Friday’s Employment report. Furthermore, the Ivey PMI data from Canada leaves significant risk for a notable USDCAD move.
USDCAD Bearish Trend
A failure back from a probe above 1.2200 (from 1.2205), to leave a more negative tone into midweek.
Despite the rebound from longer term trend line and chart support at 1.1970/42/33, the push below the impulse level at 1.2062, through 1.2000/ 1.1990 psychological/ option/ long term retracement targets maintains our bearish view for downside extension risk into May.
- We see a downside bias for 1.1993; break here aims for 1.1970/42/33, which we would look to try to hold.
- But above 1.2131 opens risk up to 1.2205, which we would look to cap.
Short/ Intermediate-term Outlook – Downside Risks:
- We see a more negative tone with the bearish threat to 1.1945/33
- Below here targets 1.1803 and 1.1729.
What Changes This? Above 1.2571 signals a neutral tone, only shifting positive above 1.2667.
Momentum: The 8-day RSI, short-term momentum is falling and has scope to go still lower this week.