The USD/CAD pair was closed at 1.35816 after placing a high of 1.35889 and a low of 1.35515. Overall the movement of the USD/CAD pair remained bullish throughout the day. The USD/CAD pair extended its previous day's gains on Friday despite U.S. dollar weakness on the weak Canadian dollar's back and decreasing Crude oil prices.
At 17:30 GMT, the Wholesale Sales from Canada for May dropped by 5.7% against the forecasted 7.4% and weighed on the Canadian dollar, ultimately pushing the USD/CAD pair on the upper track. The commodity-linked Loonie was under pressure because of the declining crude oil prices on Friday as the global recovery in fuel demand came under pressure after the increasing number of coronavirus across the globe, and many countries introduced a new round of lockdowns.
Moreover, the declines in crude oil were further bolstered by the reports that OPEC and its allies agreed to ease August's record production cuts. Thus the crude oil prices decreased, and the demand for commodity-linked Loonie also decreased, ultimately supporting the USD/CAD pair's ongoing recovery momentum.
However, the gains in USD/CAD remained under check due to the U.S. dollar's weakness across the board. The U.S. dollar remained under pressure due to poor than expected macroeconomic data from the U.S. and the increasing record number of coronavirus cases. Also, adding crude oil weakness was the ongoing US-China tensions, and the U.S. economy struggles to overcome the pandemic crisis.
At 17:30 GMT, the Building Permits from May were declined to 1.24M from the expected 1.30M and weighed on the U.S. dollar. The Housing Starts remained flat with the forecasted 1.19M in May. At 19:00 GMT, the Prelim UoM Consumer Sentiment was dropped to 73.2 from the forecasted 79.0 and weighed on the U.S. dollar. The Prelim UoM Inflation Expectations were also remained flat with the anticipated 3.1%. The weak economic data made the U.S. dollar weakened and kept the additional gains in USD/CAD limited, causing an almost flat yet bullish trend in currency pair on Friday.
The U.S. reported more than 77,000 case son Thursday that was a record high numbers since pandemic; this raised concerns over the economic recovery, which was already under pressure as it has not yet fully recovered from the first wave and lockdown crisis. The continuous emerging cases from many states of the U.S. have raised bars for another lockdown, which will push the economy on the backtrack for a prolonged period. This cautious environment in the market also kept the U.S. dollar under pressure on Friday and the gains in pair USD/CAD limited.
Daily Technical Levels
Pivot point: 1.3551
The USD/CAD is trading in a sideways trading range of 1.3601 - 1.3564 level. In between this range, the USD/CAD is likely to exhibit a choppy session, whereas the breakout will determine the fate of the pair. On the lower side, the USD/CAD can drop until the next support area of 1.2535 and 1.3503. Simultaneously, the bullish breakout of 1.3600 level can lead the USD/CAD prices further higher towards 1.3640. The technical indicators are mixed as the RSI and MACD suggest selling, while the 50 EMA recommends buying trend in USD/CAD. LEt's wait for a breakout before taking any take in the pair. Good luck!