USD/CAD subdued below 1.35 mark, awaits Canadian CPI for fresh impetus

Haresh Menghani FXStreet

The USD/CAD pair's early tepid up-move got sold into near 1.3480 level and has now dropped to fresh session low near 1.3465 region.

The pair on Thursday stalled this week's strong up-surge to 6-week highs and retreated from the key 1.35 psychological mark. A modest recovery in crude oil prices, which derives demand for the commodity-linked currency - Loonie, prompted investors to take some profits off the table. However, considering the pair's recent gains of nearly 250-pips over the past few days, the retracement could be categorized as consolidative phase.

• No fundamental evidence in the oil market to justify this week’s selloff – Goldman Sachs

Meanwhile, markets seem to have digested the US Treasury Secretary Mnuchin's overnight comments on bring a major tax reform, that helped the US Dollar to bounce of three-week lows and lifted the pair to its highest level since March 10.

• US Dollar looks for direction near 99.70

Focus now shifts to Canadian inflation figures, which would help investors grab some meaningful movement later during early NA session. From the US, the flash PMI numbers alongside existing home sales data might also influence the pair on Friday.

Technical levels to watch

A follow through retracement below mid-1.3400s is likely to drag the pair back below the 1.3400 handle, towards its next support near 1.3380 level. On the upside, sustained momentum above 1.3480-85 zone now seems to lift the pair beyond the key 1.3500 hurdle towards yearly highs resistance near 1.3535 area en-route 1.3560-70 strong resistance.

Author

Haresh Menghani

FXStreet

Haresh Menghani is a detail-oriented professional with 10+ years of extensive experience in analysing the global financial markets.

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