USD/CAD on the offers, but supported at 1.3200

The Canadian dollar is seen extending yesterday’s massive rally against its American rival in early Europe, now pushing USD/CAD closer to 1.32 handle.

CAD cheers oil-price recovery

The USD/CAD pair remains poised to test four-month troughs of 1.3165, and remains on track to book the second straight week of declines, as upbeat Canadian fundamentals coupled with hawkish BOC underpins the sentiment around the Canadian dollar.

Further, the minor recovery seen in oil prices so far this session, also provides fresh impetus to the resource-linked Loonie. Moreover, broad based US dollar weakness also collaborates to the downside in the major. The USD index drops -0.19% to daily lows of 97.07.

On Thursday, the Canadian dollar rallied hard across the board, following the release of better-than expected Canadian retail sales data, which backed the case for a monetary policy shift, as hinted by the recent comments from BOC policymaker Wilkins.

Wilkins noted last week, ‘Will assess if all the stimulus in place is still needed as economy growth continues and, ideally, broadens further”.

Looking ahead, the major will closely follow the oil price-action ahead of the crucial Canadian CPI figures, which will be a key determinant for a BOC rate hike in the coming months.

USD/CAD Technical levels                

The next resistance can be seen at 1.3254/58 (5-DMA/ Jun 19 high), 1.3300 (round figure) and 1.3357/64(20 & 200-DMA). Next support to the downside can be found at 1.3200 (zero figure/ key support), 1.3165 (4-month lows) and 1.3150 (key psychological support).