USD/CAD comes down to mid-1.2600s, Canadian CPI in focus

Haresh Menghani FXStreet

The USD/CAD pair traded with a mild negative bias on Friday and eroded part of previous session's strong recovery gains from sub-1.2600 level, two-week lows.

Currently trading around the 1.2660-55 region, the pair struggled to gain any follow through traction amid some renewed US Dollar selling bias. The greenback retreated across the board following rumours that National Economic Council Chairman Gary Cohn was set to resign, which added to growing concerns over the Trump administration's ability to push forward pro-growth economic policies.

• US: Policy unease - ANZ

On the other hand, crude oil prices seem to have entered a bullish consolidation phase and remained supportive of the mildly positive tone around the commodity-linked currency - Loonie, which is eventually seen weighing on the major.

Investors now look forward to the latest Canadian inflation figures, due for release later during early NA session, in order to determine the next leg of directional move for the major.

• Canadian CPI is seen lifting to 1.2% from 1.0% - NAB

Ahead of the key Canadian macro data, oil price dynamics and broader market sentiment around the greenback would remain key determinants of the pair's movement on the last trading day of the week.

Technical levels to watch

A follow through retracement below 1.2650 level might continue to drag the pair towards 1.2610-1.2600 support, which if broken is likely to accelerate the slide towards its next major support near mid-1.2500s.

On the upside, 1.2675 level now becomes immediate resistance, which if cleared has the potential to lift the pair beyond the 1.2700 handle towards its next major hurdle near the 1.2735-40 region.

Author

Haresh Menghani

FXStreet

Haresh Menghani is a detail-oriented professional with 10+ years of extensive experience in analysing the global financial markets.

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