The USD/CAD pair came under a heavy selling pressure in the early NA session and fell to its lowest level since August 4. As of writing, the pair was trading at 1.2590, losing 90 pips, or 0.7%, on the day.
Data released by the Statistics Canada on Friday showed that the CPI in July remained unchanged on a monthly basis, and increased to 1.2% from 1% on a yearly basis, matching the market estimates. Following the data, the loonie gathered strength against its peers, forcing the USD/CAD pair to lose more than 50 pips.
Moreover, the greenback, which struggled to build on yesterday's gains during the first half of the day amid political turmoil in the U.S., continues to weaken with the US Dollar Index now moving at 93.35, losing 0.3% on the day. University of Michigan Consumer Sentiment Index, scheduled to be released at the top of the hour, is expected to improve to 94 from 93.4. An upbeat reading could help the DXY limits its losses and close the week wşth marginal gains.
On the other hand, crude oil prices are moving higher for the second day in a row with the barrel of West Texas Intermediate now trading at $47.20, further increasing the demand for the commodity-sensitive loonie.
Technical outlook
The pair could encounter the first technical support at 1.2500 (psychological level) ahead of 1.2460 (May 3, 2016, low) and 1.2415 (Jul. 27 low). On the upside, resistances align at 1.2680 (10-DMA), 1.2755 (50-DMA) and 1.2800 (psychological level). The RSI indicator on the daily graph is moving lower towards the 30 mark, suggesting that the bearish momentum is building up.
Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers. The author will not be held responsible for information that is found at the end of links posted on this page.
If not otherwise explicitly mentioned in the body of the article, at the time of writing, the author has no position in any stock mentioned in this article and no business relationship with any company mentioned. The author has not received compensation for writing this article, other than from FXStreet.
FXStreet and the author do not provide personalized recommendations. The author makes no representations as to the accuracy, completeness, or suitability of this information. FXStreet and the author will not be liable for any errors, omissions or any losses, injuries or damages arising from this information and its display or use. Errors and omissions excepted.
The author and FXStreet are not registered investment advisors and nothing in this article is intended to be investment advice.
Recommended content
Editors’ Picks
EUR/USD turns negative near 1.0760
The sudden bout of strength in the Greenback sponsored the resurgence of the selling pressure in the risk complex, dragging EUR/USD to the area of daily lows near 1.0760.
GBP/USD comes under pressure and challenges 1.2500
GBP/USD now rapidly loses momentum and gives away initial gains, returning to the 1.2500 region on the back of the strong comeback of the US Dollar.
Gold retreats from highs on stronger Dollar, yields
XAU/USD trims part of its initial advance in response to the jump in the Dollar's buying interest and the re-emergence of the upside pressure in US yields.
XRP tests support at $0.50 as Ripple joins alliance to work on blockchain recovery
XRP trades around $0.5174 early on Friday, wiping out gains from earlier in the week, as Ripple announced it has joined an alliance to support digital asset recovery alongside Hedera and the Algorand Foundation.
Week ahead – US inflation numbers to shake Fed rate cut bets
Fed rate-cut speculators rest hopes on US inflation data. After dovish BoE, pound traders turn to UK job numbers. Will a strong labor market convince the RBA to hike? More Chinese data on tap amid signs of slow Q2 start.