The USD/CAD closed at 1.34178, after a high of 1.34449 and a low of 1.33767. Overall, the movement of the USD/CAD pair remained bullish throughout the day. The currency pair stopped its bearish streak of four days, posting gains on Friday, amid the weak WTI Crude Oil prices and a rise in the US New Home Sales.

The worsening US-China tensions, especially after the US abruptly ordered China to close its consulate in Houston by Friday, raised concerns regarding a potential cold war, pushing crude oil prices down. The increasing number of coronavirus cases raised fears that economic recovery in the US could be delayed, eventually causing the crude oil demand to decrease. This potential drop in demand caused the WTI Crude Oil price to slip below $ 41 per barrel. The weak crude oil prices weighed on the commodity-linked Loonie, ultimately pushing the prices for the USD/CAD pair onto the upside.

However, the USD/CAD pair’s gains remained limited on Friday, due to the weakness of the broad-based US dollar, despite the risk-off mood. The US dollar was under further pressure by a fresh leg down in the US Treasury bond yield. This held investors back from placing bids in the USD/CAD pair, keeping the prices within a confined range.

Meanwhile, from the US economic docket, the highlighted flash version of PMI for July weighed on the US dollar. At 18:45 GMT, the Flash Manufacturing PMI dropped to 51.3 from 52.0, and the Flash Services PMI declined to 49.6 from the 51.0 level.

However, investors mostly ignored this, because the mounting number of coronavirus cases had already disrupted the country’s economic activities, and this was to be expected. However, at 19:00 GMT, it was reported that the New Home Sales for June had reached 776K, compared to the projected 700K, lending support to the US dollar and adding to the USD/CAD pair’s upward movement. Strengthening of New Home Sales is expected, on the back of various worries, and the desire to put money into a stable asset at this time, when interest rates are near zero.

Daily technical Levels

Support Resistance

1.3409 1.3432

1.3398 1.3443

1.3387 1.3454

Pivot Point: 1.3420

The USD/CAD is trading with a neutral bias at around 1.3385, and overall it is remaining within a bearish channel that provides resistance at the 1.3385 level. On the lower side, a bearish breakout at 1.3362 could extend sell-off until the next support level of 1.3318. Further selling bias could be seen below the 1.3318 level. Overall, the RSI and MACD also support selling. Therefore, we should be looking for selling trades below the 1.3360 level, in order to capture a quick 50 pips. Good luck!