USD/CAD extends correction, trades below 1.2850

USD/CAD reversed its direction and started to decline during American session.
WTI is down more than 2% on the day, limiting USD/CAD's downside.
US Dollar Index looks to snap four-day winning streak.

Eren Sengezer FXStreet

After rising to its strongest level since December at 1.2949, the USD/CAD pair reversed its direction during the American session on Friday and erased the majority of its daily gains. As of writing, the pair was up 0.1% on the day at 1.2840. Despite this recent pullback, the pair is still up more than 300 pips for the week.

DXY drops below 93.50 as sentiment recover

Since the beginning of the week, the unabated selling pressure surrounding crude oil made it difficult for the loonie to find demand. Although the barrel of West Texas Intermediate (WTI) continues to edge lower on Friday, the downward correction witnessed in the US Dollar Index (DXY) seems to be causing the pair to move away from its highs. Currently, WTI is down 2.1% at $62.50.

With the market mood improving ahead of the weekend, the greenback is struggling to preserve its strength. At the moment, the DXY is posting modest daily losses at 93.44 and the S&P 500 Index is rising 0.4%.

Earlier in the day, the data from Canada revealed that Retail Sales rose by 4.2% on a monthly basis in June. This print missed the market expectation of 4.4% but received little to no reaction from markets.

Commenting on the underlying details of the sales report, "Statistics Canada's flash estimate for July suggested a somewhat disappointing 1.7% retreat in sales," noted analysts at CIBC. "We're hoping that just meant that Canadians were spending more money on hard-hit services that became available again."

Technical levels to watch for

USD/CAD

Overview
Today last price	1.2839
Today Daily Change	0.0010
Today Daily Change %	0.08
Today daily open	1.2829

Trends
Daily SMA20	1.2557
Daily SMA50	1.2474
Daily SMA100	1.2373
Daily SMA200	1.2557

Levels
Previous Daily High	1.2831
Previous Daily Low	1.2642
Previous Weekly High	1.2589
Previous Weekly Low	1.2489
Previous Monthly High	1.2808
Previous Monthly Low	1.2303
Daily Fibonacci 38.2%	1.2759
Daily Fibonacci 61.8%	1.2714
Daily Pivot Point S1	1.2703
Daily Pivot Point S2	1.2578
Daily Pivot Point S3	1.2515
Daily Pivot Point R1	1.2892
Daily Pivot Point R2	1.2956
Daily Pivot Point R3	1.3081

Author

Eren Sengezer

FXStreet

As an economist at heart, Eren Sengezer specializes in the assessment of the short-term and long-term impacts of macroeconomic data, central bank policies and political developments on financial assets.

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