USD/CAD bounces off multi-week lows near 1.3300

USD/CAD picks up some pace and retests 1.3330.
US headline, Core PCE drifted lower in December.
US Consumer Sentiment comes next in the docket.

Pablo Piovano FXStreet

USD/CAD now gathers some upside traction and revisits the 1.3330 region on Friday, leaving behind at the same time earlier lows in the vicinity of 1.3300, an area last traded back in late November 2022.

USD/CAD looks supported by 1.3300

USD/CAD navigates a narrow range at the end of the week and still remains unable to gather some lasting upside traction following Thursday’s strong pullback to the vicinity of the 1.3300 region.

The pair, in the meantime, remained apathetic after US inflation figures showed the headline PCE rose 5.0% in the year to December (from 5.5%) and the Core PCE gained 4.4% over the last twelve months (from 4.7%).

Additional data releases from the US calendar saw Personal Income expand 0.2% MoM in the last month of 2022 and Personal Spending shrank 0.2% vs. the previous months. Later in the session, US Pending Home Sales are due along with the final print of the Michigan Consumer Sentiment for the current month.

Further out, another positive session in prices of the WTI lends extra legs to the Canadian dollar so far, keeping the pair’s upside potential contained somehow.

In addition, spot remains en route to close the sixth consecutive week with losses, although the 1.3300 region seems to have emerged as a tough support for the time being.

CAD, in the meantime, looks well propped up by crude oil prices and the recent rate hike by the BoC (January 25). It is worth recalling that the BoC matched consensus and raised the policy rate by 25 bps to 4.50%, although it signaled that extra rate hikes are now unlikely in a context of easing inflation and some loss of momentum in the economic activity. The bank, however, is expected to remain “data dependent”.

USD/CAD significant levels

As of writing the pair is gaining 0.09% at 1.3328 and faces the next up barrier at 1.3483 (55-day SMA) followed by 1.3520 (weekly high January 19) and finally 1.3685 (2023 high January 3). On the other hand, the breach of 1.3303 (2023 low January 26) would aim for 1.3225 (monthly low November 15 2022) and then 1.3205 (200-day SMA).

Author

Pablo Piovano

FXStreet

Born and bred in Argentina, Pablo has been carrying on with his passion for FX markets and trading since his first college years.

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