USD/CAD resumes declines toward 1.3280 on Oil recovery, comments from BoC’s Wilkins

USD/CAD revisits 1.3320 levels on early Friday.
Increasing crude oil prices and absence of rate signals from the BoC’s Deputy Governor pleased CAD buyers.
Economic calendar is in focus for fresh impulse.

Anil Panchal FXStreet

USD/CAD trades near 1.3320 during early Asian sessions on Friday. The quote seems to resume its earlier declines toward 1.3280 support as traders concentrate more on oil recovery and comments from the Bank of Canada’s (BoC) Deputy Governor Carolyn Wilkins. Scheduled economic data from the US and Canada will be in focus going forward.

The USD/CAD pair refrained from extending its pullback much beyond 1.3350 as prices of Oil, Canada’s main export, strengthened on supply challenging scenarios. Main catalysts were OPEC’s February output report, Iraq’s aim for higher crude prices and the US intention to further hurt Iran by cutting its exports off.

Comments from the BoC’s Deputy Governor also helped the pair stretch its declines. While speaking at the Vancouver School of Economics and CFA Society, Wilkins made no mention of the need for the central bank’s future interest rate moves. Traders were seeking any clues for the rate-cuts after the BoC sound pessimistic in its latest appearance.

Looking forward, traders will now concentrate on the second-tier data scheduled for release from the US and Canada. Starting with January month manufacturing shipments from Canada, the anticipated +0.4% growth figure can add strength into the Loonie bulls as its much better than previous -1.3% contraction.

On the other hand, the US may also have some upbeat numbers to question the pair’s strength. Among them, likely improvements in March month NY empire state manufacturing index to 10.0 from 8.8 and a rise of Michigan consumer sentiment index to 95.3 from 93.8 could gain market attention. Also, February month industrial production might rise by +0.4% versus 0.6% decline.

USD/CAD Technical Analysis

100-day simple moving average (SMA) level of 1.3280 continues to remain on sellers’ radar as it holds the gate for extended downward trajectory toward 1.3230 and 200-day SMA level of 1.3175.

Meanwhile, immediate descending trend-line, at 1.3360, seems limiting the pair’s near-term advances, a break of which can recall 1.3410 on the chart.

Author

Anil Panchal

FXStreet

Anil Panchal has nearly 15 years of experience in tracking financial markets. With a keen interest in macroeconomics, Anil aptly tracks global news/updates and stays well-informed about the global financial moves and their implications.

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