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USD/CAD Continues to Push Higher Above 1.31 After Dismal Canada Data

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Posted by FXStreet

on Friday, 15 June 2018 06:31

 

  • Manufacturing sales in Canada contract in April.
  • NY Fed Manufacturing Index beats expectations.
  • USD/CAD rises to its highest level in nearly year above 1.31.

 

The USD/CAD pair, which closed the previous day with a 150 pips gain, built on it recent gains at the beginning of the NA session and touched its highest level since late June of 2017 at 1.3170. As of writing, the pair was trading at 1.3165, adding 0.5%, or 65 pips, on the day.

Today's data from Canada showed that the manufacturing sales contracted by 1.3% in April following March's 1.4% expansion and fell short of the market expectation of 0.6%. With the loonie facing a fresh selling wave amid the disappointing figures, the pair gained nearly 50 pips in the last hour.

On the other hand, the monthly report released by the Federal Reserve Bank of New York showed that the general headline index of the Manufacturing Survey improved to 25 in May to beat the experts' estimate of 19. Despite the positive reading, the US Dollar Index remained in its recent range below the 95 mark and was last seen at 94.80, where it was down 0.15% on the day.

Meanwhile, the weak performance of crude oil prices weighs on the commodity-sensitive CAD as well. After closing the first four days of the week with modest gains, the barrel of WTI is looking to end the week on a negative note as it loses 0.5% at the moment.

Technical outlook

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Click chart for larger image

The pair could face the first technical resistance at 1.3200 (psychological level). A decisive rise above that level could open the door for further gains toward 1.3260 (Jun. 27, 2017, high) and 1.3340 (Jun. 21, 2017, high). On the downside, supports are located at 1.3115 (daily low), 1.3000 (psychological level) and 1.2950 (Jun. 14 low). 


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