Forex News

• USD/CAD meets with a fresh supply on Thursday amid a modest USD downtick.
• Sliding Oil prices seem to undermine the Loonie and lend support to the major.
• Traders also seem reluctant ahead of the US PPI and Fed Chair Powell’s speech.

The USD/CAD pair struggles to capitalize on the previous day's goodish rebound from the 1.3900 mark and attracts fresh sellers during the Asian session on Thursday. Spot prices, however, lack bearish conviction and currently trade around the 1.3865 area, down less than 0.10% for the day.

The US Dollar (USD) bulls remain on the sidelines ahead of the US Producer Price Index (PPI) and Federal Reserve (Fed) Jerome Powell's appearance, which, in turn, is seen as a key factor weighing on the USD/CAD pair. However, a further decline in Crude Oil prices for the second straight day undermines the commodity-linked loonie and acts as a tailwind for the currency pair.

From a technical perspective, oscillators on the daily chart have started gaining positive traction and suggest that any subsequent slide might still be seen as a buying opportunity near the 1.3935 area. This should limit the downside for the USD/CAD pair near the 1.3900 mark. A convincing break below the latter, however, might shift the bias in favor of bearish traders.

Against the backdrop of this week's failure near the 1.4000 confluence (comprising the 200-day Simple Moving Average (SMA) and the 23.6% Fibonacci retracement level of the March-May fall), the USD/CAD pair might then weaken to the 1.3855 region. The downward trajectory could extend towards the 1.3800 mark en route to the year-to-date low, around the 1.3750 area.

On the flip side, a sustained strength and acceptance above the 1.4000 round figure could lift the USD/CAD pair beyond the 1.4050 intermediate hurdle, towards the 1.4100 neighborhood. Some follow-through buying would pave the way for a move towards the 1.4100 mark en route to the 1.4145-1.4150 region, or the 38.2% Fibo. level.

USD/CAD daily chart