- Crude oil recovery helps the loonie gather strength on Wednesday.
- US Dollar Index stays in the red near 95.15.
- Retail sales in Canada decline 0.2% in June.
The USD/CAD pair slumped to a daily low at 1.3007 earlier today and recovered to 1.3040 with the initial reaction to dismal retail sales data from Canada. However, the broad-based greenback weakness and the crude oil recovery forced the pair to reverse its course in the last hours. At the moment, the pair is down 0.17% on the day at 1.3015.
The data released by Statistics Canada on Wednesday showed that following a 2.2% increase in May, retail sales in Canada declined 0.2% in June to miss the market expectation of 0.1%. Although the initial market reaction to the data weighed on the loonie, the commodity-sensitive currency gathered strength as crude oil continued to push higher. After the weekly report released by the EIA revealed a draw of 5.8 million barrels in the U.S. crude oil inventories, the barrel of West Texas Intermediate advanced to a fresh 8-day high near $68. At the moment, the barrel of WTI is up 2.7% on the day at $67.85.
On the other hand, the US Dollar Index, which fell below the 95 mark for the first time since early August on rising political tensions in the U.S., struggled to make a decisive recovery during the NA session and was last seen down 0.07% on the day at 95.17. Later in the session, markets will be looking for clues in the August meeting minutes on the number of rate hikes the Fed is planning to do before the end of the year.
Technical levels to consider
1.3000 (psychological level) aligns as the initial support ahead of 1.2960 (Aug. 7 low) and 1.2915 (Jun. 8 low). On the upside, resistances could be seen at 1.3040 (100-DMA), 1.3115 (50-DMA) and 1.3175 (Aug. 16 high).
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