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Hugo in HTO Trading,

USDCAD: Pulling back after better than expected data from Canada

The favorable tone towards the CAD has been also accentuated after the Purchasing Managers Index (PMI) in September gauged by Ivey surprised investors to the upside, rising from 50.9 to 58.6.

On today’s economic agenda we have from the US the Consumer Credit Change in August that is expected to fall to $20.00B showing that individuals are borrowing less money to spend.

The USDCAD fell during the course of yesterday session but closing below the 10 day moving average and holding above the 38.2 a Fibonacci retracement at 1.1123. A bullish tone coming from technical readings remains intact, but despite higher highs in price, Stochastic is setting lower highs, shy signs that the upside may begin to get exhausted.

Expecting a downward move to 1.0959 on a break below daily support at 1.1054 (scenario 1) or a bounce from the Fibonacci level at 1.1123 could push USDCAD to the next Fibonacci level at 1.1180 (scenario 2).