The USDCAD pair broke lower as the downside was tested, breaking through the 1.3600 support level to finish in New York at 1.3575 (1.3665 yesterday). Overnight Canada’s GDP declined an unprecedented -11.6% in April following a downward revised fall in March at -7.5 (from -7.2). All sectors of the Canadian economy reported contractions highlighting the effect of the Covid-19 lockdown on the country.

Despite the dismal number, the USDCAD failed to clear 1.37, hitting an overnight high at 1.3699 before plunging through the 1.3600 support to 1.35702 (overnight low) before settling at 1.3575. A rise in Crude Oil prices and the strong performance of equities which lifted the Aussie and Kiwi Dollars also boosted the Canadian Loonie.

USDCAD has immediate support at 1.3570 overnight lows and 1.3540. Immediate resistance can be found at 1.3600 and 1.3650. Look for consolidation in a likely range today of 1.3570-1.3670. Prefer to buy dips.