USD/CAD climbs higher toward 1.3500 amid broad-based USD strength

US Dollar Index inches closer to 98.
West Texas Intermediate stays quiet above $63.
Coming up: The UoM's Consumer Confidence Index from the U.S.

Eren Sengezer FXStreet

After spending the large part of the day in a relatively tight range near mid-1.34s, the USD/CAD pair gained traction in the last couple of hours supported by the strong USD demand. As of writing, the pair was trading at 1.3492, adding 0.25% on a daily basis.

The broad-based selling pressure surrounding major European currencies following the news of cross-party talks in the UK failing on Friday seems to be helping the greenback outperform its rivals. The US Dollar Index, which started a recovery move after testing the 97 handle on Monday, advanced to its highest level since May 3 at 97.95 and was last seen near that level, adding 0.12% on a daily basis.

There won't be any macroeconomic data releases from Canada on Friday and markets will look at the U.S. preliminary consumer sentiment report released by the University of Michigan.

Meanwhile, crude oil rally, which was triggered by the heightened tensions in the Middle East and helped the commodity-loonie stay resilient against the dollar, lost its steam on Friday, allowing the pair to preserve its bullish momentum. At the moment, the barrel of West Texas Intermediate was up 0.3% on the day at $63.30.

Technical levels to watch for

The initial resistance for the pair could be seen at 1.3500 (psychological level) ahead of 1.3520 (Apr. 24 high) and 1.3600 (Dec. 21, 2018, high). On the downside, supports are located at 1.3455 (daily low), 1.3400 (50-DMA) and 1.3345 (Apr. 23 low).

Author

Eren Sengezer

FXStreet

As an economist at heart, Eren Sengezer specializes in the assessment of the short-term and long-term impacts of macroeconomic data, central bank policies and political developments on financial assets.

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