The USD/CAD pair extended overnight rejection slide from 100-day SMA hurdle and remained under some selling pressure for the second consecutive session. Against the backdrop of softer than expected US consumer inflation figures, the US President Donald Trump’s criticism over the pace of Fed rate hikes prompted some fresh US Dollar selling on Thursday and failed to assist the pair to build on previous session’s strong upsurge to two-week tops. The pair kept losing ground through the early European session on Friday and was further weighed down by a goodish pickup in crude oil prices, which provided a minor boost to the commodity-linked currency – Loonie. As of writing this article, USDCAD pair is trading at 1.3011 down by 0.18% on the day.
USD Likely to Gain Upper Hand in Case of Positive US Macro Data Outcome
The loonie is one of the early movers on the day as oil prices rebound in the wake of improving risk sentiment across markets. However, a fresh wave of an upsurge in the US Treasury bond yields helped ease the USD bearish pressure on Friday and helped to pair to defend the key 1.30 psychological mark, at least for the time being. Moving ahead, traders now look forward to the release of Preliminary UOM Consumer Sentiment, a key highlight from today’s relatively thin US economic docket, in order to grab some short-term opportunities on the last day of the week. With Nafta talk updates and Crude oil price action influencing Loonie on one end and bond yields affecting USD’s price action on other end, the pair is currently playing a tug-off war to gain upper hand against each other.
When looking at pair from technical perspective, the price is paring some of the previous day’s strong gains and remains in a short-term bearish bias, despite that it stands above the 20- and 40-simple moving averages (SMAs) in the daily time frame. On a sustained weakness below the 1.30 handle, the pair is likely to accelerate the fall back towards the 1.2950-40 support area en-route the 1.2900 round figure mark. On the flip side, immediate resistance is now pegged near the 1.3040 horizontal level and is closely followed by the 1.3065 region (100-day SMA), which if cleared should pave the way for an extension of the pair’s positive momentum.