USD/CAD is drifting lower below 1.3500 on higher risk appetite
- The Canadian Dollar is bouncing up after a five-day losing streak.
- A brighter market mood and a moderate rebound in Crude prices are supporting the CAD.
- USD/CAD broader trend remains positive while above 1.3450.
The US Dollar paring some gains on Thursday. An improved risk sentiment and a moderate rebound in Oil prices have offset the positive impact of strong US data and are weighing on the Greenback.
Investors’ appetite for risk has increased on Thursday. Most European indexes are trading with gains, following a negative opening which is giving some respite to the Canadian Dollar and weighing on the safe-haven USD.
Beyond that Crude prices extended their rebound supported by a report by the International Energy Agency (IEA) which has upgraded the current year’s global demand for Oil.
Data released on Wednesday revealed that US Retail Sales increased beyond expectations in December. These figures highlight the strong solid momentum of the US economy and pour cold water over market expectations that the Fed will start cutting rates in March.
Also on Wednesday, Canada’s Industrial Production and the Raw Materials Prices Index contracted beyond expectations, increasing negative pressure on the loonie.
Today the focus will be on the US Weekly Jobless Claims and housing data. Beyond that Atlanta Fed President and CEO, Raphael Bostic will si expected to meet the press and his comments on the bank's monetary policy will be observed with attention.
The broader trend, however, remains positive, with the pair still above previous highs, at 1.3450. Below here, the next target is 1.3350. On the upside, resistances are 1.3545 and 1.3625.
Technical levels to watch