USD/CAD extends slide toward 1.33 as oil recovery gathers steam
- WTI climbs to mid-$64s on Friday.
- US Dollar Index erases Thursday's gains.
- Coming up: Import/export price index and UoM Consumer Sentiment Index from the U.S.
After adding more than 50 pips on Thursday, the USD/CAD pair changed its direction and erased all of yesterday's gains. As of writing, the pair was trading at 1.3325, losing 0.45% on a daily basis.
Following a deep technical correction yesterday, crude oil prices gained traction on Friday with the barrel of West Texas Intermediate advancing to $64.50 area. Later in the session, Baker Hughes' oil rig count from the U.S. will be the next catalyst but the WTI is likely to post its highest weekly close of the year.
On the other hand, the greenback gathered strength on the back of upbeat macroeconomic data releases from the U.S. on Thursday and the US Dollar Index closed the day above the 97 mark. However, the upbeat market sentiment as reflected by rising US T-bond yields and global stock markets seems to be pushing investors away from the safer USD and forcing the DXY to turn south. At the moment, the index is down 0.28% on a daily basis at 96.89.
Later in the session, import and export price index data and the University of Michigan's preliminary Consumer Sentiment Index will be released from the U.S. Additionally, Bank of Canada Deputy Governor Timothy Lane is scheduled to deliver a speech.
Technical levels to consider
The pair could face the initial support at 1.3320 (50-DMA) ahead of 1.3280 (Apr. 9 low) and 1.3220 (200-DMA). On the upside, resistances are located at 1.3385 (Apr. 12 high), 1.3450 (Mar. 28 high) and 1.3500 (psychological level).
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.
