USD/CAD recovers toward 1.33 despite disappointing US data

Durable goods orders declined 4.4% in the U.S. in October.
Wholesale sales in Canada fell for the second straight month.
Crude oil loses recovery momentum.

Eren Sengezer FXStreet

After rising to its highest level since late June at 1.3316 earlier today, the USD/CAD pair reversed its course and fell to 1.3270. However, the pair started to recover its losses in the last hour and was last seen down 0.08% on the day at 1.3295.

A more than 7% drop witnessed in crude oil prices yesterday weighed on the commodity-sensitive loonie and allowed the pair to rise nearly 150 pips on the day. With the barrel of West Texas Intermediate staging a technical correction on Wednesday, the pair lost its bullish momentum. Following a rebound toward the $55 handle, the barrel of WTI struggled to extend this move and helped the pair limit its losses. WTI was last seen trading at $54.20, still gaining 1.7% on a daily basis.

Meanwhile, today's data from the United States showed that orders for manufactured durable goods fell 4.4% in October and missed the market expectation for a 2.5% drop. On the other hand, wholesale sales in Canada declined by 0.5% in September to record its second straight monthly contraction. The US Dollar Index, which failed to break above the 97 mark yesterday, is now losing 0.2% on the day at 96.62.

Later in the session, existing home sales and the UoM's Consumer Sentiment Survey will be looked upon for fresh impetus. Ahead of the Thanksgiving holiday, however, the market action is likely to stay subdued in the second half of the NA session.

Technical levels to consider

The initial resistance for the pair aligns at 1.3315 (daily high) ahead of 1.3385 (Jun. 27 high) and 1.3465 (Jun. 12, 2017, high). On the downside, supports are located at 1.3260 (Nov. 14 low), 1.3155 (Nov. 20 low) and 1.3055 (100-DMA).

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.

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