Loonie and Greenback on Tug-Off War Post Mixed Macro Data Outcome

The USDCAD pair saw a sharp rebound in favor of USD post a soft Canadian GDP data on Thursday and this continued for majority of Asian market hours of Friday. However Canadian Dollar has picked up momentum during later half of Asian market hours modestly easing a part of loss from yesterday and the Loonie is currently maintaining a range bound movement along 1.29 price handle. The Canadian dollar is back under pressure as updates to the Gross Domestic Product report dampen the outlook for growth and the pair stands at risk of facing range bound prices over the remainder of Friday’s trading session as market participants mull the timing of the next Bank of Canada rate-hike. Nevertheless, recent price action suggests the weakness will persist as USD/CAD initiates a fresh series of lower highs & lows, with the pair now at for a larger correction as the BOC alters the outlook for monetary policy.

USDCAD in a Tussle

The dovish GDP data coupled with a good US Dollar rebound supported by US economic data, positive US Treasury bond yields and renewed selling around crude oil prices put a dent demand for the commodity-linked currency during yesterday’s North American market hours. However BOC’s hawkish stance despite dovish GDP data has helped Loonie cap US Greenback’s momentum around 1.29 price handle. On release font, Canadian Calendar remains light during today’s trading session but major focus lies on Non-Farm Payroll, Unemployment rate and ISM manufacturing PMI data scheduled to release later today in US markets.

A positive US macro data could inspire buying interest in Greenback’s favor lifting the pair further towards reclaiming the key 1.3000 psychological mark. On the flip side, the 1.2900 handle now seems to act as an immediate strong support, which if broken would help loonie to completely erase yesterday’s loss. Expected support and resistance for the pair are at 1.2932 / 1.2912 / 1.2898 and 1.2978 / 1.2996 / 1.3015 respectively.