USD/CAD: Upside still capped by 1.3050 amid firmer Oil, ahead of data

Unabated US dollar buying across the board keep the recovery mode intact in the USD/CAD pair on the 1.30 handle, but the bulls struggle to take-out the 1.3050 resistance amid a rally in oil prices.

The spot is seen making several recoveries attempts so far this Friday, having hit daily lows of 1.3015 following the dovish overnight comments from the Fed officials Williams and Clairda that fuelled bets of a 50bps Fed rate cut later this month.

However, the dollar bulls were offered a reprieve in the Asian trades after the New York
(NY) Fed disavowed the dovish comments from President Williams. The recovery in the US dollar across the board, since then, has picked up the pace, with the USD index now testing daily tops just shy of the 97 handle, up +0.20% on the day.

Despite the ongoing USD demand, the pair struggles with the recovery, as the rally in oil prices appears to lend support to the Canadian dollar. The black gold benefits from escalating US-Iran geopolitical conflict after the US President Trump reported that the US Navy ship downed an Iranian drone in Gulf. Although, the Iranian officials refuted Trump’s comments.

Further, markets remain cautious ahead of the key macro releases due later in the NA session, including the US Michigan Consumer Sentiment Index and Canadian retail sales data, which are likely to have a strong bearing on the spot.