USDCAD chases 1.20 psychological level after downbeat trade data
The trade gap rose widened to $51.4 billion in March, the largest since October 2008, from $35.4 billion in February. Analysts had estimated the deficit to jump to $41.2 billion.
The data moves in line with last week’s dismal report that signaled a tremendous ease in U.S. first-quarter growth to 0.2 percent, down from 2.2 percent in the previous quarter.
In Canada, the trade deficit also mushroomed to a record high of $3-billion in March from a revised of $2.2-billion shortfall.
Although both U.S. and Canada data missed forecasts, the pair fell as investors give more focus to U.S. data before the release of the awaited nonfarm payrolls data on Friday.
The NFP may signal American employers added 231,000 jobs in April from 126,000 jobs in March.
Later in the day, a U.S. report may show services sector growth eased to 56.2 in May from 56.5 a month earlier.
As of 14:16 GMT, the USDCAD traded around 1.2057 after setting a new low of 1.2045.
The pair now heads to the physiological support level at 1.20, where the closing above this level last week helped the pair to avoid further losses.
However, further bearishness may take place due to the cross of Daily SMA20 over SMA50, yet a breach of the 1.20 level is needed.
For the bearish scenario to occur, the RSI 14 momentum indicator must drop beyond the 30 line.