USD/CAD consolidates near 8-1/2 month tops, just above mid-1.3000s

   •  The pair defies US politics-led renewed USD selling.
   •  Trade tensions continue to weigh on the CAD.
   •  Today’s economic releases eyed for fresh impetus.

The USD/CAD pair was seen oscillating in a narrow trading range and consolidated overnight strong gains to 8-1/2 month tops. 

The pair has managed to hold with modest gains and seemed rather unaffected by the recent US political turmoil, which has led to some renewed US Dollar selling on Thursday.

Persistent worries over the US President Donald Trump’s protectionist stance, coupled with NAFTA uncertainty and the recent dovish comments by the BOC Governor Stephen Poloz continues to weigh on the Canadian Dollar and supported the pair’s recent upsurge. 

Meanwhile, a sideways move in crude oil prices did little to influence demand for the commodity-linked currency – Loonie, with trade tensions acting as an exclusive driver of the pair’s bullish momentum to the highest level since late June.

Today’s economic releases - housing market data, industrial production figures and Prelim UoM Consumer Sentiment from the US, along with the Canadian Manufacturing Sales data - would now be looked upon for some fresh impetus. 

Technical outlook

Omkar Godbole, Analyst and Editor at FXStreet writes: “The pair looks set to test 1.3157 (rising channel resistance) - 1.3230 (bull flag resistance) in the next 5-6 weeks. A minor pullback to 1.29 cannot be ruled out in the short-run as suggested by the daily RSI. Only a close below 1.2803 (March 12 low) would signal bullish invalidation.”