USD/CAD prints four-day losing streak around mid-1.3100s amid sluggish US Dollar, Oil price
- USD/CAD remains pressured at weekly low, reversing Friday’s bounce off 10-month low.
- US Dollar snaps two-day recovery, Oil price remains sluggish as market sentiment dwindles on mixed Fed, China news.
- Second-tier employment, housing data from US and Canada eyed for clear directions as bears approach yearly low.
USD/CAD bears cheer the US Dollar’s retreat from the weekly high amid sluggish Oil prices early Thursday morning in Europe. That said, the Loonie pair drops for the fourth consecutive day to around 1.3145 by the press time, after refreshing the weekly low with the 1.3133 figure. In doing so, the quote consolidates Friday’s stellar rebound from the lowest levels since September 2022.
US Dollar Index (DXY) drops 0.25% intraday to retest the 100.00 round figure while snapping a two-day rebound from the lowest level since April 2022. With this, the greenback justifies the previous day’s downbeat US housing data and mixed concerns about the Fed, as well as ignores the optimism at the US banks.
US Building Permits for June marked a contraction of 3.7% versus the previous increase of 5.6% (revised) whereas the Housing Starts also slumped 8.0% for the said period from 15.7% revised prior. Though the previously released slower growth of the US Retail Sales for June contrasted with promising details to defend the Federal Reserve in keeping the rates higher for longer, as well as help in announcing a 0.25% rate hike in July. The same triggered the US Dollar’s corrective bounce off the 15-month low on Tuesday and helped defend the recovery on Wednesday, ahead of the latest retreat.
On the other hand, WTI crude oil remains indecisive near $75.40 as it struggles for clear directions after reversing from a one-week high the previous day. The black gold’s latest inaction could also be linked to the dual between the lesser-than-expected inventory draw and the softer US Dollar.
Elsewhere, the fresh fears of the US-China tussles, emanating from the comments of China diplomat and the US House of Representatives move concerning outbound investments and AI chips, seem to prod the USD/CAD bears of late.
It should be noted that the mixed concerns about the Federal Reserve’s (Fed) move in 2023, even as the July rate hike is confirmed, contrast with the Bank of Canada’s (BoC) hawkish bias to keep the USD/CAD bears hopeful.
Looking ahead, second-tier employment and housing clues from the US and Canada may entertain intraday traders of the USD/CAD pair ahead of Friday’s Canadian Retail Sales and the next week’s key Federal Reserve (Fed) monetary policy meeting. It’s worth noting that headlines surrounding the Fed and China will also direct short-term moves of the Loonie pair and are worth observing.
Technical analysis
Despite the USD/CAD pair’s latest weakness, a three-week-old bullish triangle formation, currently between 1.3110 and 1.3205, challenges the sellers amid steady RSI and sluggish MACD signals.
Author
Anil Panchal
FXStreet
Anil Panchal has nearly 15 years of experience in tracking financial markets. With a keen interest in macroeconomics, Anil aptly tracks global news/updates and stays well-informed about the global financial moves and their implications.
