After losing nearly 50 pips and slumping to mid-1.24s in the early trading hours of the NA session, the USD/CAD pair retraced its losses and turned positive on the day above the 1.25 handle. As of writing, the pair was at 1.2504, up 0.2%.
The pair's sharp fall witnessed after the softer-than-expected inflation data from the U.S. failed to last as the December rate hike odds weren't impacted negatively. Moreover, Consumer Sentiment Index released by the University of Michigan rose to its highest level since 2004 at 101.1, providing an additional boost to the greenback. The US Dollar Index, which plummeted to its lowest level since late September at 92.59, gained traction and took back its losses. At the moment, the index was at 92.94, virtually unchanged on the day.
On the other hand, following yesterday's fall, crude oil prices gathered strength on Friday, with the barrel of West Texas Intermediate holding on to its daily earnings above the $51 mark and capping the pair's upside.
Although the pair is on track to close the second day in a row higher, it remains in the red on a weekly basis. The broad-based selling pressure witnessed on the greenback following Wednesday's FOMC minutes and a nearly $2 increase in the price of the barrel of WTI for the week seem to be the primary reasons why the pair is looking to close the week lower.
Technical outlook
With today's modest rise, the RSI indicator on the daily graph turned north above the 50 mark, signaling a short-term bullish momentum buildup. The first technical support for the pair could be seen at 1.2500 (psychological level) ahead of 1.2410 (50-DMA) and 1.2335 (Sep. 27 low). On the upside, resistances align at 1.2555 (Oct. 10 high), 1.2635 (Aug. 30 high) and 1.2665 (Aug. 31 high).
Today's data from the U.S.
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