USD/CAD continues to move sideways around 1.3570
- USD/CAD is having a difficult time setting direction on Friday.
- WTI is posting modest daily losses, trades below $41.
- US Dollar Index fails to build on Thursday's recovery gains.
The USD/CAD pair gained 60 pips on Thursday boosted by the broad-based USD strength and the poor performance of crude oil prices. In the absence of significant fundamental drivers, the pair struggles to build on Thursday's gains and moves sideways around 1.3570.
USD valuation continues to impact USD/CAD's action
The USD outperformed its rivals on the back of risk-off flows on Thursday as investors adopted a cautious mood amid resurfacing concerns over new coronavirus-related shutdowns in the US. With global equity indexes edging lower, the US Dollar Index (DXY) closed in the positive territory for the first time in the fifth day. Nevertheless, recovering sentiment is not allowing the DXY to stretch higher on Friday, keeping the pair's upside limited.
Meanwhile, crude oil prices also felt the bearish pressure on Thursday and the barrel of West Texas Intermediate (WTI) lost 0.67%, making it tough for the commodity-related loonie to stay resilient. On Friday, the WTI continues to push lower and was last seen down 0.58% on the day at $40.47.
Building Permits and Housing Starts data will be featured in the US economic docket. However, investors are likely to ignore these data and remain focused on Wall Street's performance. At the moment, major equity indexes look to open the day modestly higher with the S&P 500 futures gaining 0.35%.
Technical levels to watch for