- WTI fails to cling to recovery gains on Friday, looks to settle near $71.
- US Dollar Index consolidates daily gains above 95.20.
- USD/CAD remains on track to end the second straight week higher.
After closing the previous day modestly lower, the USD/CAD pair extended its losses during the first half of the day on Friday and found support near 1.30. With crude oil losing its traction in the NA session, the loonie struggled to find demand and the pair gathered momentum and rose to a fresh session high of 1.3050. As of writing, the pair was up 0.08% on a daily basis at 1.3044.
Rising concerns over the potential negative impact of the U.S. - China trade conflict on the global economic growth and oil demand weighed on crude oil prices throughout the week. The barrel of West Texas Intermediate, which touched its highest level in four years near $77 earlier in October, lost more than $3 this week and was last seen trading around $71. The weekly report released by Baker Hughes showed that the number of total active oil rigs increased to 869 from 861 to put some extra weigh on the WTI's shoulders.
On the other hand, the US Dollar Index finally staged a meaningful recovery on Friday after dipping below the 95 handle. Today's data from the U.S. showed that import prices rose 0.5% in September and the UoM reported that the Consumer Confidence Index eased slightly to 99 in October's first estimate from 100.1 in September. Commenting on the sentiment report, "The American consumer remains a potent source of economic growth. The past year has been the most optimistic period since the expansion of the late Clinton and early Bush years," FXStreet Senior Analyst Joseph Trevisani said.
Technical outlook via FXStreet European Chief Analyst Mario Blascak
Technically, the USD/CAD is trading within the sideways trend since reaching the cyclical peak at around 1.3380 on June 27. The 1.2930 line representing the 38.2% Fibonacci retracement of the uptrend from 1.2270 to 1.3350 served as a solid support for USD/CAD. Only the break below that barrier would open further potential on the downside. Given the fundamental and interest rate outlook, the upward potential for USD/CAD seems more feasible. The currency pair needs to break above 1.3090 representing the confluence of the trendline resistance and 23.6% Fibonacci retracement of the above-mentioned move to break further higher. Momentum is in the neutral territory and both MACD and Slow Stochastic are pointing upwards on a daily chart.
Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers.