USD/CAD extends Thursday’s recovery move

Haresh Menghani FXStreet

The USD/CAD pair added on to Thursday's recovery strength from below 200-day SMA and is now trading at a fresh session high near 1.3170 region.

Maintaining its high degree of correlation, a profit-taking drop in crude oil prices is seen weighing on the commodity-linked currency, loonie. Moreover, the prevalent risk-off sentiment around European equity markets, amid renewed Deutsche Bank jitters, is driving investors towards the perceived safe-haven currencies - like the US Dollar and Japanese Yen.

Next in focus would be the monthly Canadian GDP release, which would be accompanied by US economic releases that include - Core PCE Price Index, Personal Income / Spending data, Chicago PMI and Revised UoM Consumer Sentiment, scheduled for release later during NA trading session.

Technical levels to watch

A follow through buying interest above 1.3185 level (yesterday's high) should assist the pair to reclaim 1.3200 handle and head towards its next resistance near 1.3225 area. On the downside, only a weakness below session low support near 1.3140-35 region would negate the bullish bias and turn the pair vulnerable to break through 1.3100 round figure mark and retest the very important 200-day SMA support near 1.3070 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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