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  • USD/CAD recovers after news broke that the US-China trade talks will resume in early-October.
  • Trade/political headlines, US data will be in the spotlight.

With the CNBC breaking the news of the US-China trade talks, USD/CAD rises to 1.3275 amid initial Friday trading.

China’s Vice Premier Liu He will be representing the delegation from Beijing during the two-day trade meet in Washington starting from October 10, as per the news. This adds to the previous trade-positive statements from Chinese diplomats while also ignoring Bloomberg news highlighting the US stepping back from renewing sanction relief licenses to the American enterprises doing business with China’s Huawei.

With this, the Loonie pair ignores price weakness of its main export item, i.e. Oil. Crude Oil fails to respect geopolitical tension surrounding the Middle East as a faster recovery in Saudi Aramco’s oil/gas production weighs on the energy prices.

It should also be noted that the US Dollar’s (USD) broad strength can be considered as a reason behind the price run-up. The greenback stays as buyers’ favorite despite political uncertainty at the US and no major change in headline data released so far. The reason could be upbeat tone of the Federal Reserve officials during their recent media appearances.

While trade/political headlines will keep garnering the attention of momentum traders, monthly releases of the US Durable Goods Orders, Michigan Consumer Sentiment Index and Personal Income/Spending numbers will also be watched closely for fresh action.

Technical Analysis

The 200-day simple moving average (SMA) around 1.3305 becomes the key upside barrier holding the gate for the pair’s run-up to the monthly top near 1.3385 whereas 1.3230 and 1.3180 seem nearby important supports to watch during the pair’s declines.