- USD/CAD edged lower on Friday and eroded a part of the previous day’s positive move.
- Rallying crude prices underpinned the loonie and exerted some pressure on the major.
- A subdued USD demand did little to influence ahead of Canadian monthly retail sales.
The USD/CAD pair traded with a mild negative bias through the early European session and was last seen hovering near daily lows, around the 1.3580 region.
The pair failed to capitalize on the previous day’s goodish intraday positive move of nearly 100 pips and met with some fresh supply on the last trading day of the week. The downtick was exclusively sponsored by a strong positive move in crude oil prices, which underpinned demand for the commodity-linked currency – the loonie.
Oil prices rallied around 3% on Friday and shot to over three-month tops, around the $40.00/barrel mark on reports that Iraq and Kazakhstan have pledged to comply better with oil cuts. This comes amid signs of a gradual recovery in the global oil demand, fueled by the easing of government lockdowns imposed to control the coronavirus.
On the other hand, the upbeat market mood – despite concerns about a surge in new coronavirus cases – dented the US dollar’s perceived safe-haven status and did little to lend any support to the USD/CAD pair. The USD bulls seemed rather unimpressed, rather shrugged off the risk-on mood-led strong intraday pickup in the US Treasury bond yields.
Moving ahead, market participants now look forward to Friday’s Canadian economic docket, highlighting the release of monthly retail sales data, for a fresh impetus. Later during the US session, the Fed Chair Jerome Powell’s comments at a panel discussion might influence the USD price dynamics and further contribute to produce some trading opportunities.
Technical levels to watch
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