- USD/CAD refreshes intraday high to 1.3970, prints two-day winning streak.
- US dollar extends recovery as the US-China tussle intensifies.
- WTI pullback from 10-week top amid fresh risk-off and challenges to demand.
- Canadian Retail Sales will decorate the calendar, US-China tension will be the key.
USD/CAD takes the bids to 1.3978, up 0.16% on a day, during the initial trading hours of Friday. The Loonie pair recently gained bids as updates from China’s 13th National People's Congress (NPC) heavy the risks and offer additional strength to the US dollar. Also, the downbeat comments weigh on the crude oil, Canada’s main export, which in turn adds strength to the pair.
By citing the coronavirus (COVID-19) as the key reason for not providing the year 2020’s GDP target, Chinese diplomats triggered speculations that the dragon nation still fears the worrisome outcome of the pandemic.
Additionally, updates from the NPC suggest that Chinese policymakers are edging closer to tighten their grip over Hong Kong. The issue has recently been in the spotlight after the US policymakers showed readiness to make sure that Hong Kong is free from the dragon nation’s pressure.
Before a few days, concerns mounted that the Asian major is back to its pre-crisis level, as per the crude demand, which set the floor for the WTI benchmark’s fresh run-up. That said, the black gold drops to $33.32, down 1.90%, by the press time.
Elsewhere, the US dollar stretches Thursday’s recovery moves amid the fresh risk-off sentiment. That said, the US dollar index (DXY), the gauge of the greenback versus major currencies, register 0.10% gains to 99.50 as we write.
Moving on, Canada’s April monthly Retail Sales, expected to drop 10.0% on MoM basis versus +0.3% prior, can occupy the mostly light economic calendar while updates from China and/or concerning the US-China tussle will be the key for fresh direction.
Technical analysis
Successful recovery beyond 50-day EMA, at 1.3950 now, propels the quote towards 1.4000 round-figures ahead of highlighting May 14 top near 1.4140. Alternatively, the pair’s drop below 1.3950 can refresh the monthly low well under the current bottom around 1.3865.
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