USD/CAD again bounces off multi-month low on USD recovery, Canadian Retail Sales in focus

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  • USD recovers across the board after the New York Fed downplayed the President Williams’ earlier comments.
  • The US Michigan Consumer Sentiment Index and Canadian Retail Sales data will join trade/political news to direct near-term market moves.

Given the New York Fed’s attempt to downplay the President Williams’ previously dovish comments, the US Dollar (USD) manages to recover some of its earlier losses and triggers the USD/CAD pair’s pullback towards 1.3040 during early Friday morning.

The Loonie pair initially dropped to the fresh lows since late-October 2018 amid signs of a 50 basis points rate cut from the key Federal Reserve policymakers including the New York Fed President John Williams.

However, the Federal Reserve Bank of New York, later on, downplayed the bearish comments by stating that the President’s speech was academic and based on research and was not about potential policy actions at the upcoming FOMC meeting.

Limiting the pair’s upside was WTI recovery on the back of the US comments that they have downed an Iranian drone and also due to Iran’s complain to the United Nations (UN) that their oil tanker is being seized by the British Navy.

It should also be noted that the US-China trade developments are going on with Reuters quoting the US Treasury Secretary Steve Mnuchin who highlights chances of the in-person meeting of the diplomats.

Looking forward, monthly readings of the US Michigan Consumer Sentiment Index (July) and Canadian Retail Sales (May) will be up for grabs during the day. While the US consumer confidence gauge is expected to inflate to 98.5 from 98.2, the Canadian data could flash 0.3% growth versus 0.1% prior on a monthly basis with Core figure likely rising to 0.4% against 0.1% previous readouts.

Technical Analysis

Considering the pair’s repeated failure to slip beneath 1.3000 round-figure, chances of its pullback to 1.3100 seem brighter on the break of February month low surrounding 1.3070. However, a downside break of 1.3000 may fetch the quote to 1.2970 and 1.2915 numbers to the south.

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