USD/CAD clings to gains near 1.4000, looks to close second straight day higher

USD/CAD pulls away from four-day highs, stays above 1.4000.
Modest rebound seen in crude oil prices helps commodity-related CAD find demand.
US Dollar Index rises on risk aversion on Friday.

Eren Sengezer FXStreet

The USD/CAD pair rose to its highest level since Monday at 1.4050 on Friday but started to retrace its rally in the late American session. As of writing, the pair was up 0.41% on a daily basis at 1.4010. Despite the recovery USD/CAD was able to stage on Thursday and Friday, it remains on track to close the week in the negative territory.

Retail Sales in Canada fell sharply in March

Earlier in the day, the data published by Statistics Canada revealed that Retail Sales declined by 10% on a monthly basis in March. However, this reading came in line with market expectation and helped the CAD limit its losses. Additionally, Retail Sales Excluding Autos only decreased by 0.4% in the same period and beat analysts' estimate for a fall of 5% by a wide margin.

Meanwhile, heightened US-China tensions weighed on market sentiment on Friday and caused risk-sensitive crude oil prices to push lower. After climbing to its highest level in more than two months at $34.65 on Thursday, the barrel of West Texas Intermediate dropped all the way to $30.70 on Friday.

However, after the weekly Baker Hughes data showed that the total number of active oil rigs in the US fell to a record low of 237, the WTI extended its rebound and allowed the CAD show resilience against the USD. At the moment, the WTI is still down 2.35% on the day at $33.10.

On the other hand, the greenback capitalized on risk-off flows on Friday. The US Dollar Index, which slumped to 99 on Thursday, was last up 0.42% on the day at 99.84.

On Monday, the US markets will be closed due to the Memorial Day holiday. Later in the day, Bank of Canada Governor Stephen Poloz will be delivering a speech at 1730 GMT.

Technical levels to watch for

USD/CAD

Overview
Today last price	1.4009
Today Daily Change	0.0054
Today Daily Change %	0.39
Today daily open	1.3955

Trends
Daily SMA20	1.4016
Daily SMA50	1.4085
Daily SMA100	1.367
Daily SMA200	1.3442

Levels
Previous Daily High	1.3971
Previous Daily Low	1.3891
Previous Weekly High	1.4141
Previous Weekly Low	1.3901
Previous Monthly High	1.4299
Previous Monthly Low	1.385
Daily Fibonacci 38.2%	1.394
Daily Fibonacci 61.8%	1.3922
Daily Pivot Point S1	1.3908
Daily Pivot Point S2	1.386
Daily Pivot Point S3	1.3828
Daily Pivot Point R1	1.3987
Daily Pivot Point R2	1.4018
Daily Pivot Point R3	1.4066

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.

EUR/USD struggles to regain momentum in the low1.1600s

EUR/USD is giving some signs of life in the aftermath of two severe days of losses on Wednesday, reclaiming the 1.1600 hurdle and above on the back of the resurgence of a mild selling bias around the US Dollar. Moving forward, the usual US weekly Claims will take centre stage on Thursday ahead of Friday’s crucial NFP data.

GBP/USD appears bid around 1.3370

GBP/USD reverses part of its recent multi-day decline, gathering some balance and managing to reach the 1.3400 region, where some initial resistance seems to have turned up. Cable’s uptick comes in response to some loss of momentum in the Greenback despite the geopolitical scenario remaining fragile.

Gold recovers modestly despite intensifying Middle East crisis

Gold keeps its daily gains well in place, although a break above the $5,200 mark per troy ounce still remains elusive on Wednesday. The yellow metal’s rebound comes in response to the persistent flight-to-safety amid intense geopolitical tensions in the Middle East and the bearish performance of the US Dollar.