USD/CAD headed to lowest close since June 2015

USD/CAD is consolidating important daily and weekly losses. The pair bottomed today at 1.2338, the lowest in two years after NFP. Other economic reports from the US limited the decline and the greenback trimmed losses. 

At the moment, the pair is hovering slightly below 1.2400, down 85 pips for the day. It has fallen more than two hundred pips during the last two days. Today’s slide pushed the price below the 1.2410/40 barrier favoring a bearish acceleration. 

The Loonie is the top performer among G10 currencies. It jumped on Thursday after upbeat growth data from Canada and continue to rise on Friday. 

Canada: Real GDP rose 1.1% in the second quarter, following a 0.9% gain in the first quarter

Outlook 

It is the third weekly decline in a row for the USD/CAD. From a technical perspective, the dominant trend remains bearish and the negative momentum could increase with a consolidation under 1.2400. 

From a fundamental perspective, the latest Canadian data showed the economy rising at more than 4% supporting the tightening bias from the Bank of Canada. The divergence between in policy expectation between the Fed and BoC disappeared months ago. Now the risk is tilted toward a more aggressive BoC compared to the Fed. A rate hike from the Canadian central bank this month, would not be a surprise.