USD/CAD trims earlier losses and returns to 1.3600 area
- The US dollar bounces up from 1.3550 and returns to 1.3600 area.
- The dollar shrugs off previous weakness and recoups daily losses.
- Longer-term, the USD is still capped below downward trending resistance.
The US dollar has shrugged off the weakness seen during the early US session and has bounced up strongly from 1.3558, to reach levels right below 1.3600. The pair has pared previous losses, with the Canadian dollar losing momentum and is about to turn positive on daily charts.
The US dollar picks up as the CAD loses momentum
The Canadian dollar opened the day on a strong footing, aiming to regain some of the ground lost over the previous two days buoyed by a solid recovery in oil prices and a positive market sentiment. WTI futures appreciated about 3.5% earlier today, reaching levels beyond $40 for the first time in three months.
Greenback’s decline, however, was contained at 1.3550 area and the US dollar managed to bounce up during the US trading session following downbeat macroeconomic data in Canada and a moderate pullback on oil prices.
Canadian retail sales plummeted by 26.5% in April, following a 9.9% decline in March and beating market expectations of a 15% contraction. beyond that, oil prices are retreating from three-month highs at $40.49 although they remain close to $40 after having appreciated more than 8% so far this week.
Longer-term, the USD remains biased lower
On a longer-term perspective, the dollar remains capped below the downtrend resistance line from May 18 highs, right now at 1.3605. The pair should close the day above here to increase bullish momentum, aiming towards 1.3675 (June 15 high) before testing the 100-day SMA at 1.3765 area. On the downside, below 1.3600, the pair might seek support at 1.3500 area (June 16 low) before heading towards the 200-day SMA, now at 1.3470.
USD/CAD key levels to watch