- USD/CAD regained positive traction on Friday despite the prevalent USD selling bias.
- Weaker oil prices undermined the loonie and remained supportive of the move up.
- Softer Canadian monthly retail sales provided an additional boost in the last hour.
The USD/CAD pair refreshed daily tops during the early North American session, with bulls now eyeing a sustained move beyond the 1.3200 round-figure mark.
Following the previous day's pullback of around 100 pips from over one-week tops, the pair caught some fresh bids on the last trading day of the week and seemed rather unaffected by the prevalent US dollar selling bias. The post-FOMC USD short-covering move faded rather quickly amid concerns over the sustainability of the US economic recovery, fueled by Thursday's disappointing US macro data.
However, a weaker tone surrounding crude oil prices undermined the commodity-linked currency – the loonie. This, in turn, was seen as one of the key factors that extended some support to the USD/CAD pair and remained supportive of the intraday positive move. The Canadian dollar was further weighed down by the disappointing release of monthly retail sales figures for the month of July.
Data published by Statistics Canada showed Retail Sales in Canada increased by 0.6% during the reported month. The reading was below the previous month's increase of 0.7% and also missed market expectations pointing to a growth of 1%. Adding to this, core retail sales, which exclude auto sales, 0.4% MoM as compared to a 0.5% rise anticipated and 15.5% previous (revised down from 15.7%).
It will now be interesting to see if bulls are able to capitalize on the move or the USD/CAD pair meets with some fresh supply at higher levels, indicating persistent selling bias at higher levels. This would be seen as a fresh trigger for bearish traders and turn the pair vulnerable to break through the recent trading range held over the past 1-1/2-weeks or so.
Technical levels to watch
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