USD/CAD: Bears attack 1.3150 amid broad US dollar weakness, US/Canadian data eyed

• USD/CAD extends the previous day’s losses to attack Wednesday’s multi-month low.
• WTI remains mildly bid, US dollar trims earlier gains amid risk-on mood.
• Canadian Retail Sales and New Housing Price Index will precede US PMIs to entertain the traders.

USD/CAD bounces off intraday low of 1.3159 to 1.3166 in the latest upswing ahead of the European session open on Friday. Even so, the loonie pair prints 0.15% losses while declining for the second straight day.

While searching for clues, the broad US dollar weakness and mild optimism gain market attention ahead of the key preliminary PMIs for Canada and America. The US dollar index (DXY) drops for the second day to 92.60, down 0.16%, as we write.

The risk-tone sentiment cheers the coronavirus (COVID-19) headlines that say Pfizer is on track to seek regulatory review in October as well as receding cases from Australia’s Victoria and the US and China. Also supporting the risk-on mood could be comments from the Chinese Commerce Ministry that signaled the phase one deal with the US will be held soon. On the other hand, the Trump administration members said, “they’ll be in touch”. On the contrary, uncertainty surrounding the US stimulus package weighs on the market sentiment.

Amid all these plays, the S&P 500 Futures gain 0.20% whereas the US 10-year treasury yields also rise 1.2 basis points (bps) to 0.656% by the press time.

Other than the aforementioned catalysts, upbeat prices of crude oil, Canada’s main export item, also favor the pair bears to aim for the multi-month low.

Looking forward, market consensus favor comparatively stronger data from Canada and hence the actual outcome of the key statistics will be watched closely. Should the figures copy the pattern of the previous day’s robust ADP numbers, the pair may witness further downside.

Technical analysis

FXStreet’s Ross J Burland discusses multiple charts to highlight the made or break time,

The price of the pair is at a juncture where analysis is done from a longer-term time frame pulls out two scenarios, depending on what goes down on the daily time frame over the next day or so if it doesn't just continue to consolidate that is above and below the structure.

Read: USD/CAD Price Analysis: Bullish above, bearish below, potential trend-line breakouts in focus