USDCAD Outlook: Strong Canadian data meets technical resistance

Recent data indicates a stronger-than-expected Canadian economy, impacting the USDCAD. Notably, building permits surged by 14.9% in October, significantly exceeding the forecast of a -0.9% decline. Additionally, the capacity utilization rate for Q3 was 78.5%, revised from 77.6%. The wholesale trade in October also rose by 0.1%, beating the -0.1% estimate. The Bank of Canada kept interest rates at 2.25% this week. Initial market reactions led to price increases, but sellers emerged against the 100-hour moving average, pushing prices down. This behavior reinforces a bearish trend, with prices falling consistently over the past 13 trading days from around 1.4100 to 1.3754. Traders have utilized the falling 100-hour moving average (currently at 1.38177) as a risk-defining level. Each time the price has tried to rise against this moving average, sellers have stepped in. The next significant target on the downside is the 1.3721-1.3726 area of previous swing lows, which traders should monitor closely when planning their next moves.