The USD/CAD pair now seems to have entered a bullish consolidation phase and was seen oscillating in a narrow trading range, just above the key 1.30 psychological mark. The pair built on its overnight goodish rebound from the 1.2900 neighborhood, further supported by a slight disappointment from Canadian monthly and quarterly GDP growth figures, and continued gaining positive traction for the second consecutive session on Friday. The uptick seemed rather unaffected by a subdued US Dollar price action and softer US Treasury bond yields. Bulls, however, seemed to take cues from a modest retracement in crude oil prices, which tend to dampen demand for the commodity-linked currency – Loonie. As of writing this article, USDCAD pair was trading at 1.3013 up 0.22% on the day.
USD Gains Ground on Softer Canadian Macro Data
Meanwhile, optimism over a possible positive outcome from the ongoing North Atlantic Free Trade Agreement (NAFTA) negotiations between the US and Canada was seen as one of the key factors keeping a lid on any further up-move, at least for the time being. Hence, it would be prudent to wait for a strong follow-through buying before confirming that the pair might have bottomed out in the near-term. Traders now look forward to the release of Canadian RMPI and the revised UOM US consumer sentiment index for some short-term opportunities on the last trading day of the week. Risk-off sentiment seeped back following Thursday’s inconclusive NAFTA talks between the US and Canada and also amid renewed US-China trade tensions and Emerging Markets (EM) sell-off.
When looking from technical perspective, Any further up-move is likely to confront immediate resistance near the 1.3040-50 region, above which the pair is likely to head towards testing the 1.3080 supply zone en-route the 1.3100 round figure mark. On the flip side, weakness below the 1.30 handle now seems to find immediate support near the 1.2980 area, which if broken might turn the pair vulnerable to slide back towards challenging the 1.2900 mark.
This article was originally posted on FX Empire
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