The US dollar is drifting lower against the Canadian dollar, with USD/CAD down 0.16% and easing from the 1.4200 area toward a zone that once acted as significant resistance. Softer US inflation data, stronger Canadian jobs and a rally in oil are all weighing on the pair.
The US dollar is drifting lower again against the Canadian dollar, with USD/CAD trading down 0.16% on Thursday. The pair is easing from the 1.4200 area into a zone that had previously been meaningful resistance.
According to FXEmpire analyst Christopher Lewis, the pullback probably reflects a mix of drivers. Canadian employment numbers came in higher than anticipated last week, while US CPI and PPI figures were lower than anticipated this week. Oil has also been rallying since the war kicked off again, and while crude does not sway this pair as much as it once did, it still supports the Canadian dollar in general.
That former resistance now matters because market memory could come into the picture as price returns to it. Traders will be watching for signs of a bounce to continue the move higher that started at the beginning of May. For now, the pair sits in an area of inflection that Lewis suggests could prove interesting.
The setup keeps softer US inflation and firmer Canadian data on one side against a supportive oil backdrop on the other, leaving USD/CAD to test whether old resistance still holds.
Source: FXEmpire
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