[ForexNews]

USD-CAD broke through the 1.0300 level and is continuing lower ahead of major support at 1.0004, which is the 76.4% Fibonacci retracement of the 0.9059-1.3065up-move. Short-term momentum indicators remain broadly bearish. While RSI and stochastics are nearing oversold levels, they are not there yet. A break of 1.0004 would target a retest of the 0.9059 major low from 9 November 2007. Later today, we get August manufacturing sales. The market consensus for this is -1.6% m/m vs. 5.5% m/m previously. This series has been very volatile in the last year in the wake of the global recession. Having peaked at 2.80% y/y as of May 2008, it collapsed to -6.10% m/m in November 2008 and January 2009 before staging something of a recovery to 2.20% m/m in June 2009 and 5.50% m/m in July 2009. Going forward, fragile US domestic demand is likely to temper the extent of the recovery in Canadian manufacturing. On Thursday, we get the September CPI report.