USD/CAD drops to weekly lows below 1.3150 amid broad-based USD weakness
|- Fed's officials' comments weigh on the USD on Friday.
- Industrial production expands less than expected in the U.S. in October.
- Crude oil recovery helps the loonie gather strength.
After spending the majority of the day in a relatively tight range below the 1.32 mark, the USD/CAD pair lost its traction in the early NA session and fell to its lowest level in a week at 1.3127. As of writing, the pair was trading at 1.3137, losing 0.3% on a daily basis.
In an interview with CNBC, the Federal Reserve's new Vice Chairman, Richard Clarida, warned that the Fed needed to factor in the global economic slowdown in its outlook and added that the Fed was close to the "vicinity of neutral." Following these remarks, the US Dollar Index, which tracks the greenback against a basket of six major currencies, fell to its lowest level since November 8 at 96.40 and was last seen down 0.68% on the day at 96.45. Additionally, a 1% drop seen in the 10-year U.S. T-bond yield put some extra weight on the greenback's shoulders.
The only data from the U.S. today showed that the industrial production in October increased by 0.1% to miss the market expectation of 0.2%. Commenting on the data, "The US manufacturing sector remained healthy in October rising 0.3%. The overall industrial sector gain of 0.1% was dragged down by a 0.3% decline in mining and a 0.5% drop in utility output," FXStreet Senior Analyst Joesph Trevisani said.
On the other hand, crude oil prices are looking to close the third day in a row higher with the barrel of West Texas Intermediate adding 1.7% on a daily basis and helping the commodity-sensitive loonie stay resilient against its rivals.
Technical levels to consider
The pair could face the first technical support at 1.3085 (Nov. 8 low) ahead of 1.3040 (50-DMA) and 1.3000 (psychological level/200-DMA). On the upside, resistances are located at 1.3185 (daily high), 1.3260 (Nov. 14 high) and 1.3335 (Jun. 21 high).
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