The Loonie erased losses against the US dollar during the American session amid a recovery in crude oil prices. USD/CAD peaked at 1.3665, the highest since Monday but if failed to hold and pulled back. The WTI barrel bounced sharply and is now positive for the day, back at $49.50 after bottoming at $48.15.
The pair dropped to test the 1.3575/85 area but the decline stopped at 1.3582. Currently, it trades at 1.3620, marginally higher for the day, as the US dollar gains momentum following a video, where former FBI director Comey admits under oath that investigation obstructions never happened.
While US politics will continue to move markets, tomorrow in Canada, important economic data will be released, that could influence on the CAD. April CPI and March Retail Sales report are due.
The pair continues to move in a consolidation range, between 1.3580 and 1.3650. The correction from 1.3795 remains intact but the Loonie appears to be losing strength.
A confirmation below 1.3570 could open the doors for an extension of the correction to 1.3530 and then 1.3490. On the flip side, a confirmation above 1.3650, could clear the way to 1.3700, above the next resistance is seen at the 1.3740 zone.