USD/CAD retreats to session lows near 1.2670 in quiet day
- USD/CAD is edging lower ahead of the American session.
- US Dollar Index stays below 90.50 ahead of Jobless Claims data.
- WTI consolidates weekly gains, continues to trade above $58.
After spending the Asian session in a narrow channel around 1.2700, the USD/CAD pair came under modest selling pressure during the European trading hours and dropped to a daily low of 1.2671. As of writing, the pair was down 0.2% on the day at 1.2675.
The USD's market valuation continues to impact USD/CAD's movements as crude oil prices move sideways on Thursday. FOMC Chairman Jerome Powell on Wednesday reaffirmed the Fed's commitment to providing support to the economy and noted that they wouldn't start tightening the policy in response to an improving labor market.
Following these comments, the US Dollar Index (DXY) closed the fourth straight trading day in the negative territory on Wednesday and seems to be struggling to stage a rebound ahead of the weekly Initial Jobless Claims data. At the moment, the DXY is down 0.07% on the day at 90.36.
There won't be any macroeconomic data releases featured in the Canadian economic docket in the remainder of the week. In the meantime, the barrel of West Texas Intermediate was last seen posting small daily losses at $58.27 on a daily basis.
USD/CAD technical outlook
Credit Suisse analysts think that USD/CAD is likely to extend its slide to 1.2656 if it manages to clear the 1.2686/82 support area.
"Immediate resistance is seen at 1.2710, then 1.2766, above which would see a move back to 1.2783/87, where we would expect to see fresh sellers," analysts added. "Removal of here though would see 1.2828/33 next. Above 1.2845, we look for another test of 1.2870/81 and 1.2896/2907.”
Additional levels to watch for