USD/CAD pulls away from daily lows, recovers to mid-1.28s
- Wholesale data from Canada beats expectations.
- WTI fails to rise above $58.
- DXY remains in tight range near 93.
The USD/CAD pair came under a renewed selling pressure in the early NA session and dropped to a fresh five-day low at 1.2817 before starting to retrace its losses. As of writing, the pair was trading at 1.2850, still down 0.22% on the day.
Today's data from Canada showed that following a 1.1% contraction in September, wholesale sales increased 1.5% to $63.0 billion in October, surpassing the market estimate of 0.5%. Although the loonie gathered strength against its peers on upbeat data, it failed to drag the pair lower as crude oil prices lost their bullish momentum.
After advancing to a weekly high at $57.91, the barrel of West Texas Intermediate reversed course and was last seen trading at $57.70, up 0.3% on the day. The API yesterday revealed a larger-than-expected drawdown in crude oil inventories in the U.S. and a similar reading from the EIA today could bring another buying wave in the NA session and weigh on the pair.
In the meantime, despite the positive developments surrounding the tax legislation in the U.S., the US Dollar Index is having a tough time staging a decisive recovery and continues to move sideways near 93 handle.
Technical levels to watch
The first crucial support for the pair is located at 1.2830 (200-DMA). A daily close below that level could open the door for further losses toward 1.2785 (50-DMA) and 1.2700 (psychological level). On the upside, resistances align at 1.2880 (daily high), 1.2915 (Oct. 31 high) and 1.3000 (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.
