USD/CAD on the bids around 1.3350 as soft WTI dims charm of upbeat Canadian data

  • WTI weakness favors the USD/CAD pair’s short-covering moves.
  • Retail sales numbers will be in focus for fresh direction.

USD/CAD is taking the rounds near 1.3350 while heading into the European session on Thursday. The Loonie pair dipped yesterday as Canadian trade and inflation numbers pleased sellers but the recent weakness of WTI triggered the quote’s U-turn. Traders may now concentrate on retail sales numbers from the US and Canada for fresh impulse.

On Wednesday, the decline in the US trade deficit couldn’t win over the increase in international merchandise trade, consumer price index (YoY) from Canada.

However, the weakness failed to last long as markets booked some profits off WTI as EIA released weekly inventory decline that was lesser than the private industry stock change number.
Increase in Iranian exports of crude, as estimated by Reuters, could also be the reason behind WTI’s pullback from the near five-month high.

Crude being Canada’s largest export item, the USD/CAD pair has a negative correlation with WTI.

Looking forward, March month retail sales control group from the US will confront with February month retail sales data from Canada around 12:30 GMT. Forecasts suggest that the US reading could increase to +0.4% from -0.2% whereas the Canadian number might rise to +0.2% from 0.1%.

USD/CAD Technical Analysis

While 1.3400 acts as nearby resistance, a descending trend-line from March-high, at 1.3440, could challenge buyers afterward. In a case prices rally beyond 1.3440, 1.3510 and 1.3600 might become their next targets.

On the contrary, 50-day simple moving average (SMA) figure near 1.3315 and 1.3250 may entertain short-term sellers prior to challenging them with an upward sloping support-line at 1.3220 and 200-day SMA level of 1.3200.

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