- A goodish rebound in oil prices underpinned the loonie and prompted fresh selling around USD/CAD.
- Better-than-expected Retail Sales data further provided an additional boost to the Canadian dollar.
- Sliding US bond yields, risk-on mood kept the USD bulls on the defensive and added to the selling bias.
The USD/CAD pair extended its steady intraday descent through the early North American session and refreshed daily lows, around the 1.2030-25 region in the last hour.
The pair struggled to capitalize on its early uptick, instead met with some fresh supply in the vicinity of the 1.2100 mark and turned lower for the second consecutive session on Friday. The downfall was sponsored by a goodish rebound in crude oil prices, now up over 2% for the day, which tend to underpin demand for the commodity-linked loonie.
The Canadian dollar got an additional boost following the release of better-than-expected domestic Retail Sales figures. Data published by Statistics Canada showed the total value of sales at the retail level increased by 3.6% in March. This marked a notable deceleration from 4.8% growth recorded in February but was still higher than the 2.3% rise anticipated.
On the other hand, the US dollar languished near multi-month lows amid expectations that the Fed would retain its ultra-lose monetary policy for a longer period. Adding to this, a fresh leg down in the US Treasury bond yields and the prevailing bullish sentiment in the equity markets further acted as a headwind for the safe-haven greenback.
Meanwhile, the USD/CAD pair has now moved well within the striking distance of six-year lows, around the 1.2015-10 region touched earlier this week. This is closely followed by the key 1.2000 psychological mark, which if broken decisively will set the stage for an extension of over one-year-old, well-established bearish trajectory.
Technical levels to watch
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