- Broad-based USD weakness doesn’t allow the pair to extend its rally.
- WTI trades in a tight range above the $45 handle.
- Coming up: Trade balance and housing data from the U.S.
After posting its highest daily close since mid-May of 2017 at 1.3620, the USD/CAD pair stays relatively quiet on Friday as thin trading conditions ahead of the New Year break keep the price action subdues. As of writing, the pair was trading at 1.3603, losing 15 pips on a daily basis.
Despite the broad-based USD weakness on Thursday, the pair was able to push higher above the 1.36 mark as the falling crude oil prices weighed on the commodity-related loonie. With the barrel of West Texas Intermediate trading in a tight range above the $45 mark and the US Dollar Index extending its slide today, the pair found an opportunity to correct its recent uptrend. Later in the session, the EIA is going to publish its weekly oil report, which could cause sharp fluctuations in crude oil prices.
Meanwhile, ahead of the trade balance and home sales data, the US Dollar Index is losing 0.35% on a daily basis at 96.25.
Technical levels to consider
The initial resistance for the pair aligns at 1.3660 (Dec. 27 high) ahead of 1.3720 (May 15, 2017, high) and 1.3790 (May 5, 2017, high). On the downside, supports are located at 1.3575 (Dec. 27 low), 1.3490/1.3500 (Dec. 21 low/psychological level) and 1.3445 (Dec. 20 low).
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