- USD/CAD fails to remain positive after bearish candlestick formation, WTI recovery.
- The US dollar’s retreat also seems to play its role.
- Canadian Retail Sales, US New Home Sales and coronavirus headlines will be the key.
Amid broad US dollar retreat, as well as WTI recovery, USD/CAD steps back from a four-year high to the intra-day low of 1.4376, currently down 0.73% to 1.4408, during Friday’s Asian session.
The US Dollar Index (DXY) drops from the three-year top amid rising coronavirus (COVID-19) worries following the downbeat news from New York and California while Goldman Sachs’ forecast of jobless claims add weakness into the greenback.
Also favoring the pair’s pullback moves was WTI’s recovery from multi-year lows. The energy benchmark extends U-turn from 1985 lows to currently around $27.11, up 5.11%, as improving conditions in China offer relief to the energy traders amid virus worries.
Market’s risk-tone remains mildly positive while taking clues from the US treasury yields, up three basis points (bps) to 1.158%, as well as the Asian stocks.
Looking forward, Canada’s January month Retail Sales and February month Existing Home Sales from the US could offer intermediate clues while COVID-19 headlines will keep the driver’s seat.
Technical Analysis
Considering the trend reversal signaling candlestick formation, the pair is likely to extend its latest pullback unless flashing the fresh top above 1.4670. In doing so, 1.4000 could be the bears’ best choice.
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