“¢ The post-Powell USD selling pressure now seems to have abated.
“¢ Bullish oil prices underpinned Loonie and seemed to cap gains.
“¢ Today’s release of Canadian monthly GDP eyed for fresh impetus.
The USD/CAD pair lacked any firm directional bias and was seen oscillating in a narrow trading band, just below the 1.3300 handle through the Asian session on Friday.
After Wednesday’s sharp retracement from five-month tops, a combination of diverging forces failed to provide any meaningful impetus and led to a subdued/range-bound price action over the past two trading session.
With investors looking past dovish sounding comments by the Fed Chair Jerome Powell on Wednesday and Thursday’s softer than expected US core PCE price index, a modest US Dollar uptick was seen lending some support.
Meanwhile, the overnight sharp rebound in crude oil prices, supported by expectations that OPEC and its allies will reduce output by over 1 million bpd from January 2019, underpinned the commodity-linked Loonie.
The Canadian Dollar was further supported by news that Canada plans to formally sign the new NAFTA agreement – USMCA this Friday and further collaborated towards keeping a lid on any meaningful up-move for the major.
Today’s economic docket, highlighting the release of monthly Canadian GDP growth figures and Chicago PMI from the US, along with a scheduled speech by New York Fed President John Williams will now be looked upon for some fresh impetus.
Technical levels to watch
On a sustained move beyond the 1.3300 handle, leading to a subsequent break through the 1.3315 level has the potential to lift the pair back towards multi-month highs, around the 1.3355-60 region.
On the flip side, immediate support is pegged near the 1.3240 horizontal zone, below which the pair is likely to accelerate the slide further towards challenging the 1.3200 round figure mark.