USD/CAD struggles to find direction post-data
Following the macroeconomic data releases from the U.S. and Canada, the USD/CAD remains in its 50-pip daily range. As of writing, the pair is trading at 1.3243, down 0.2%, or 25 pips, on the day.
According to the data released from Canada, foreign investment in Canadian securities fell to $10.6 billion in April from $15.42 billion in March. On the other hand, Building Permits in the U.S. contracted by 4.9% in May from -2.5% in April. After rising to its weekly high at 97.55 on Thursday, the US Dollar Index went into a consolidation phase on Friday, making it difficult for the pair to find a direction.
- US: Privately-owned housing units in May were at 1,168,000
- Canada: Foreign investment in Canadian securities totaled $10.6 billion in April
Moreover, the barrel of West Texas Intermediate has been consolidating in a tight range below the $45 handle in the last couple of days, failing to provide a catalyst for the commodity-linked loonie. Later in the session, Baker Hughes will release the U.S. Oil Rig Count but it's unlikely to impact the WTI prices and bring volatility to the pair ahead of the weekly close.
Technical outlook
The RSI on the daily graph remains near the 30 mark, suggesting that the pair's bearish momentum is losing strength and a technical correction could be underway before another leg down. 1.3300 (psychological level) could be seen as the first technical resistance ahead of 1.3365/70 (200-DMA/10-DMA) and 1.3430 (20-DMA). On the flip side, supports align at 1.3165 (Jun. 14 low), 1.3100 (psychological level) and 1.3010 (Feb. 16 low).
- USD/CAD: Daily close below 1.3224 would add to bearish sentiment – RBC CM