“¢ The pair fails to capitalize on the overnight post-data goodish rebound.
“¢ Bullish oil prices underpin Loonie and prompt some fresh selling on Friday.
“¢ Traders now eye monthly Canadian GDP/US data for some fresh impetus.
The USD/CAD pair met with some fresh supply on Friday and extended overnight rejection slide from levels just above the 1.3200 round figure mark.
The pair did catch some bids during the early North-American session on Thursday following an unexpectedly strong than expected US GDP print, coming in to show that the economic growth in the last quarter of 2018 stood at 2.6% annualized pace.
The US Dollar got a goodish lift in wake of a sharp upsurge in the US Treasury bond yields, which coupled with softer Canadian data – large than expected jump in trade deficit figures and weaker RMPI, lifted the pair to an intraday high level of 1.3207.
The uptick, however, lacked any strong bullish conviction and quickly ran out of steam at higher levels amid the prevailing bullish sentiment surrounding crude oil prices, which tend to underpin demand for the commodity-linked currency – Loonie.
Against the backdrop of output cuts by OPEC+, oil rallied further on Friday and was further supported by better than expected Chinese manufacturing PMI, which eventually turned out to be one of the key factors exerting some fresh downward pressure on the major.
Moving ahead, today’s economic docket, highlighting the monthly Canadian GDP growth figures and the US ISM manufacturing PMI, will now be looked upon for fresh impetus and some meaningful trading opportunities on the last trading day of the week.
Technical levels to watch
A follow-through selling has the potential to continue dragging the pair further towards challenging the 1.3100 handle en-route early-Jan. swing lows support, around the 1.3070-65 region. On the flip side, the 1.3170 level, followed by the 1.3200-1.3210 region might continue to act as an immediate hurdle, above which the recovery could further get extended back towards 100-day SMA barrier near mid-1.3200s.
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