The selling pressure seen on the USD/CAD pair seems to have weakened in the last hour as investors approach the commodity-sensitive loonie cautiously ahead of the critical OPEC summit Vienna. Despite major global currencies seeing some corrective price action as US greenback momentum slows down, the USDCAD pair has managed to move range bound holding support range firmly above 1.325 handle. As of writing the pair is trading at 1.3289 with 0.20% decrease in value. Earlier in the NA session, the pair erased its daily gains after the greenback lost its strength against its rivals amid falling T-bond yields. The US Dollar Index, once again, failed to hold above the 95 mark and slumped to mid-94s. However, the latest headlines regarding a possible oil output increase decision in OPEC summit scheduled later today is made it difficult for the CAD to stay resilient against the buck.
An OPEC delegate claimed that producers were discussing four possible scenarios on output levels including 1 million, 1.5 million, and 1.8 million increases in production. Crude oil prices reacted negatively to these remarks and the barrel of West Texas Intermediate broke below the $66 mark. WTIUSD on Thursday went as low as $64.48 and closed for the day at $65.97. However the pair moved back into $66 price handle on early Friday Asian market hours as news hit market that the cartel would only increase the output by 600k as many members of cartel are not capable of meeting the 1 million BPD spike and as Cartel members are of divided opinion over output spike decision.
As investors await for updates from OPEC summit before placing further bets on Loonie, Investors focus on macro data from Canadian market which is scheduled to see updates on Core retail sales and Core CPI data (YoY) with Core CPI forecast slightly dovish at 1.4% as opposed to previous reading of 1.5% while Core retail sales data has hawkish forecast at 0.5% which was previously at -0.2%. On US markets, investors focus on Manufacturing PMI, Markit Composite PMI and Service PMI with all three forecast slightly dovish compared to previous readings. If the pair closes today below 1.33 handle, it could continue to erase its weekly gains and aim for 1.3200 as trading session begins next week. On the flip side resistances could be seen at 1.3335/40 price range depending on how macro data on OPEC decision impacts the pair as market closes for the week.
This article was originally posted on FX Empire
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