USDCAD falls to 3 week low at 1.2428 and subsequently bounces to 1.2530

USDCAD spot rate: 1.2510 - 1.2515 (AS AT 8:19AM PST)

RANGES:	Asia:	1.2504	to	1.2546
	Europe:	1.2472	to	1.2534
	North America:	1.2428	to	1.2530

Technical Support / Resistance:

S2	S1	R1	R2
1.2350	1.2400	1.2617	1.2725

Key Economic Data Releases:

-U.S. consumer price index m/m: 0.2% (exp. 0.2%) y/y: 0/.0% (exp. -0.1%)
-U.S. CPI ex food and energy m/m: 0.2% (exp. 0.1%) y/y: 1.7% (exp. 1.6%)
-U.S. housing price index: 0.3% (exp. 0.5%)

-U.S. Markit manufacturing PMI: 55.3 (exp. 54.7)

-U.S. new home sales: 0.539 million (exp. 0.470 million) % change: 7.8% (prev. 4.4%)

-U.S. Richmond Fed manufacturing: -8 (prev. 0)

Key Event Calendar:

DATE	CANADA	U.S.A.
Mar. 25		Durable goods
Mar. 26	Bank of Canada Poloz speech	Markit services PMI
Mar. 27		GDP Q4, consumer sentiment index

Yesterday, USDCAD traded from 1.2536 up to 1.2615 before falling to 1.2496. The pairing edged higher to 1.2546 in Asian trade on broad-based USD strength as China manufacturing data came in at an 11 month low and signaled economic contraction. The trend changed course in Europe with USDCAD falling to 1.2472 as oil traded over $48. U.S. headline CPI data was near expectation but the age component was weak. A quick USD sell-off saw USDCAD drop from 1.2510 to 1.2428 – a 3 week low. The move was short-lived with the pairing bouncing back to 1.2530. USDCAD has since eased to 1.2510. Over the past two months, USDCAD has tested the 1.2350 – 1.2400 “quadruple bottom” support area 4 times while recently testing a “double-top” resistance at 1.2835 on two occasions last week.

Sentiment in USCAD appears to be neutral with no clear upward or downward trend at the moment. Currently, the TSX and the DJIA are up 0.75% and 0.14% respectively. EURCAD is down 0.30% trading between 1.3638 and 1.3739. GBPCAD is down 0.70%, trading between 1.8576 and 1.8733. JPYCAD is unchanged trading between 0.01043 and 0.01047. Gold is up 0.14% trading between $1,185 and $1,195USD/oz., silver is up 0.32% trading between $16.83 and $17.05USD/oz., while oil is up 1% trading between $46.69 and $48.53.

Sources: Reuters, Bloomberg, FXStreet, RBC Capital Markets, Bank of Canada, U.S. Federal Reserve, CNBC, Forexlive