USD/CAD jumps to 1.3400 neighborhood

Haresh Menghani FXStreet

• A modest USD uptick helps the pair to regain positive traction on Friday.
• Weaker crude oil prices undermine Loonie and provide an additional boost.
• Traders now eye US monthly retail sales data for some fresh impetus.

The USD/CAD pair regained positive traction on Friday and has now moved within striking distance of reclaiming the 1.3400 handle.

After a brief consolidation phase, the pair picked up the pace during the early European session and was being supported by a modest US Dollar uptick on the last trading day of the week.

An expected Fed rate hike move next week, coupled with the prevalent risk-off mood underpinned the greenback and turned out to be one of the key factors driving the pair higher.

Adding to this, a mildly softer tone around crude oil prices dampened demand for the commodity-linked currency - Loonie and further collaborated to the pair's goodish intraday up-move.

With a combination of positive forces lifting the pair back closer to weekly tops, a follow-through positive momentum, led by some technical buying above the 1.3400 handle, now looks a distinct possibility.

Later during the early North-American session, the US monthly retail sales data, a key highlight of today's economic docket, will now be looked upon for some short-term trading impetus.

Technical levels to watch

On a sustained move beyond the 1.3400 handle, the pair is likely to aim towards retesting 18-month tops, around the 1.3445 region. On the flip side, the 1.3360-50 region now seems to act as a strong support, which if broken might turn the pair vulnerable to aim towards challenging the 1.3300 handle.

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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