- The pair prints new 3-day highs around 1.3380.
- US Producer Prices rose 0.5% MoM in March.
- WTI drops near 1% following IEA report.
The Canadian Dollar is trading on the defensive vs. its American peer in the second half of the week and is now lifting USD/CAD to fresh 3 day highs in the 1.3380 region.
USD/CAD looks to oil, data
Another bout of buying interest around the greenback is pushing spot to the vicinity of the key barrier at 1.3400 the figure amidst positive prints from the US docket and a correction lower in crude oil prices.
In fact, the barrel of West Texas Intermediate is down around 1% in the $63.70 region after the IEA said earlier in the session that the demand outlook on crude oil faces an extremely uncertain scenario.
Also weighing on WTI, the EIA reported on Wednesday another build in US crude oil supplies by more than 7M barrels during last week, adding to the nearly 7.3M barrels build seen the week before.
In the meantime, the current upside momentum in the buck has been reinforced after US Producer Prices rose at a monthly 0.6% during March and 2.2% from a year earlier, both prints surprising markets to the upside. In the same line, Initial Claims increased by 196K WoW, the lowest level in the last 50 years.
In Canada, the New Housing Price Index came in flat inter-month in February, matching consensus.
What to look for in CAD
CAD keeps looking to the broad risk-appetite trends and crude oil dynamics as the main drivers of the price action in the near term along with developments from the US-China trade negotiations. In addition, the pair stays vigilant on the yields spread between Canadian and the US money markets, all amidst declining expectations of further tightening by the BoC in the next months and a renewed neutral stance from the Fed.
USD/CAD significant levels
As of writing the pair is gaining 0.53% at 1.3386 and faces the initial hurdle at 1.3402 (high Apr.5) followed by 1.3450 (high Mar.28) and finally 1.3467 (high Mar.7). On the other hand, a breach of 1.3283 (low Apr.9) would aim for 1.3223 (50% Fibo of the October-December up move) and then 1.3195 (200-day SMA).
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