The USD/CAD pair was declined on Friday, despite the US dollar strength across the board, on the back of rebounded oil prices. On Friday, WTI Crude oil prices recovered some of its previous day's losses and surged to $36.97 per barrel after dropping to $36.52, due to increased fears of the second wave of COVID-19. The Faded optimism about a swift recovery inn US demand for crude oil dragged the oil prices towards 36.52 level. However, crude oil recovered its daily losses and reached near $37 per barrel after the hopeful results of COVID-19 drug's clinical animal trials from China.
The top Pharmaceutical of the US Moderna also announced starting the final trial of its potential COVID-19 vaccine in June, which added optimism for economic recovery and helped crude oil recover its daily losses. The increased Crude oil prices added in the strength of commodity-linked currency Loonie and dragged the pair USD/CAD below 1.3530 level on Friday.
However, at 17:30 GMT, the Capacity Utilization Rate was dropped to 79.8% against the expected 80.1% in the first quarter and weighed on the Canadian dollar, which kept a lid on any additional losses in USD/CAD pair.
Furthermore, the US dollar was strong on the board at the end of the week after the macroeconomic data release, but it failed to limit the decline of the USD/CAD pair. At 19:00 GMT, the Prelim UoM Consumer Sentiment increased to 78.9 from 75.0 of expectations and supported the US dollar.
Whereas, the gloomy economic outlook and its recovery from Federal Reserve weighed on the US dollar when the Fed in its monetary policy report said that road to US economic recovery was long and extraordinary uncertain. This statement weighed on the US dollar and added in the losses of USD/CAD currency pair.
Daily Technical Levels
Pivot Point: 1.3552
The USD/CAD pair is testing double top resistance at 1.3668 level, and a bullish breakout of 1.3669 level can extend buying until the next resistance level of 1.3820 level. While below this level, we can expect the commodity currency to find support around 1.3540 level. The RSI and 50 EMA are supporting bullish bias today. Let's wait for a breakout to capture a quick buy trade over 1.3670 level today. Good luck!