- Trade pessimism weighed on commodity-linked currencies and helped gain some traction.
- The uptick seemed rather unaffected by bullish Oil prices and weaker USD price action.
- Investors look forward to Canadian monthly retail sales data for some meaningful impetus.
The USD/CAD pair held steady above mid-1.3200s through the early European session on Friday and remained well within a broader trading range held over the past four trading sessions.
Following the previous session’s intraday rejection slide from the very important 200-day SMA barrier, just above the 1.3300 handle, the pair managed to regain some positive traction on the last trading week. Bulls seemed unaffected by a modest pickup in Crude Oil prices and weaker US Dollar rather took cues from fading optimism over the resumption of the US-China trade talks.
Bulls shrug off positive Oil prices
Oil prices held stronger amid escalating geopolitical tensions in the Middle East, especially after the Saudi-led coalition launched a military operation in Yemen’s port city of Hodeidah. This comes in retaliation to the last weekend attack on a key Saudi Arabian supply hub, which knocked out 5% of the global oil supply. However, the commodity-linked currency – Loonie failed to benefit from rising oil prices.
Bulls even shrugged off the prevalent selling bias surrounding the US Dollar, which remained on the defensive on the back of fresh weakness in the US Treasury bond yields and despite the Fed’s hawkish rate cut on Wednesday.
On the trade-related front, contradicting comments by two White House advisers, followed by China’s warning to the US for its intervention in the Hong Kong issue raised doubts over any breakthrough from the upcoming talks between the world’s two largest economies in early-October and weighed on commodity-linked currencies – including the Canadian Dollar.
Moving ahead, Friday’s economic docket highlights the release of Canadian monthly retail sales data, which will further influence the domestic currency and produce some short-term trading opportunities during the early North-American session. Later in the day, a scheduled speech by Boston Fed President Eric Rosengren might further contribute towards providing some impetus on the last trading day of the week.
Technical levels to watch