• BoC’s business outlook survey continues to weigh on the Canadian Dollar.
• Weaker oil prices further undermine Loonie and remained supportive.
• The up-move seemed rather unaffected by a subdued USD price action.
The USD/CAD pair climbed to near two-week tops on Tuesday, with bulls making a fresh attempt to conquer/extend the momentum further beyond the 1.3400 handle.
The pair once again showed some resilience below the 1.3300 mark and witnessed a solid intraday turnaround in reaction to the BoC’s Business Outlook Survey, showing that sentiment softened in the first quarter of 2019 and the indicator slumped to -0.6 from 2.2.
This coupled with a follow-through pullback in crude oil prices further undermined demand for the commodity-linked currency – Loonie and continued fueling the positive momentum for the second consecutive session on Tuesday.
Meanwhile, bullish traders seemed rather unaffected by a subdued price action surrounding the US Dollar, which remained on the defensive in wake of the US President Donald Trump’s latest criticism of the Fed’s recent monetary policy tightening.
It would now be interesting to see if the pair is able to capitalize on the positive momentum as traders now look forward to Canadian manufacturing sales data and second-tier US economic releases for some short-term momentum play.
The key focus, however, will be on this week’s other important macro data from the US and Canada, including the latest Canadian consumer inflation figures on Wednesday, which might help provide some meaningful impetus for the pair’s near-term trajectory.
Technical levels to watch