The USDCAD came under heavy selling pressure yesterday after U.S.
CPI data came in much weaker than expected, triggering a decisive technical breakdown
The pair fell below the key support zone between 1.4125 and 1.4143, moved well beneath the 100-hour moving average, and broke an upward-sloping trendline that had guided the rally since May 1. One of the more encouraging developments for sellers was what happened after the initial break. The subsequent corrective bounce stalled right at the underside of the broken trendline, where fresh sellers stepped back in.
That successful retest confirmed former support had turned into resistance and gave bears the confidence to extend the move lower. The decline continued through the Asian session, with the pair reaching a low of 1.4040. However, the move stopped just ahead of the next major downside target near the mid-June highs around 1.4020, prompting a modest rebound.