The USD/CAD pair spiked to a daily high at 1.3015 in the American trading hours as the loonie weakened after reports claiming that the U.S. and Canada wouldn’t be able to reach a NAFTA deal this week. However, the pair lost its traction in the last hour and turned negative on the day after crude oil surged higher on the back of the weekly EIA report, which showed that crude oil stocks in the U.S. decreased 2.1 million barrels. Boosted by the EIA data, the barrel of West Texas Intermediate rose to its highest level in a week at $71.55 yesterday and hit an intra-day high of $71.70 today post which it is currently trading at $71.47 up 0.15% on the day. In addition to falling crude oil stocks, the report also revealed that the gasoline output in the U.S. decreased to an average of 10.3 million barrels per day.
Soft USD in Broad Market Favored Already Hawkish Loonie’s Momentum Resulting in Decline Below 1.29 Handle
The USD/CAD pair remained under some selling pressure for the third consecutive session on Thursday, with bulls trying to defend the 1.2900 handle in early Asian market hours. The pair extended this week’s rejection slide from 100-day SMA support turned resistance and was being weighed down by the prevailing bearish sentiment surrounding the US Dollar. As the demand for US Greenback in broad market slowed down, the pair fell below 1.29 handle in European market hours and is currently trading at 1.2897 down by 0.19% on the day. The ongoing bullish run in crude oil prices underpinned the commodity-linked currency – Loonie and has continued to exert downward pressure across today’s market hours.
Traders now look forward to the US economic docket, featuring the second-tier releases of Philly Fed Manufacturing Index, usual initial weekly jobless claims and existing home sales data. This coupled with Canadian ADP report might produce some meaningful trading opportunities later during the early North-American session. A follow-through weakness below the 1.2900 handle is likely to get extended towards the very important 200-day SMA support, currently near the 1.2865 region. On the flip side, any attempted recovery back above 1.2935-40 regions might now be capped and confront some fresh supply near the key 1.30 psychological mark.