USD/CAD: Mixed catalysts portray another sluggish day above 1.3600

• USD/CAD fails to extend pullback from 1.3629 beyond 1.3652.
• Firm WTI, risk reset confront fears of the coronavirus, trade wars.
• US Michigan Consumer Sentiment Index, Personal Consumption Expenditure decorate the calendar.

USD/CAD eases to 1.3637 during the Asian session on Friday. The loonie pair’s latest weakness drags it to the day’s open. The move resembles the previous day’s Doji candlestick formation and suggests one more day without a decisive performance. While the latest strength of Canada’s main export, crude oil, plays negative for the quote, fears of the coronavirus (COVID-19) wave 2.0 and trade war tame the bears.

WTI prints 0.17% gains on a day while taking rounds to $39.15. In doing so, the energy benchmark keeps its pullback from $37.17 to favor the buyers. The reason for the black gold’s recovery could be traced to the upbeat performance of global equities and geopolitical tension between the US and Iran, not to forget the latest blast in Tehran.

Market sentiment dwindles for a clear direction despite worries concerning the wide pandemic outbreak in the US than the officially noted. As per the latest CDC figures, the US had 37,667 new cases while 692 people died due to the deadly virus on June 25. Elsewhere, trade tussles between the US and the rest of the key global economies, including China, the European Union (EU), the UK and Canada, also weigh on the risk-tone. The Trump administration earlier showed readiness to levy fresh tariffs on the aluminum exports from Canada.

Amid all these plays, the US 10-year Treasury yields seesaw around 0.68% but Japan’s Nikkei 225 gain 0.80% to 22,440 as we write. However, the S&P 500 Futures remain directionless around 3,070 by the press time.

No major data/event is up for publishing during the Asian session, nor from Canada. As a result, market players will keep eyes on the virus, trade updates ahead of the US second-tier figures. “Income was temporarily boosted by federal payments under the CAREs Act resulting in a strong gain for the personal income of 10.5% in April. Both the market and Westpac expect a reversal in May (-6.0% and -4.5% respectively). The opposite is anticipated for personal spending, a robust gain to follow the collapse seen in April under lockdown (-13.6% in April). PCE deflator measures are likely to be flat as oil prices remain soft and economic slack is felt. The final estimate for Uni. Michigan Consumer Sentiment will confirm the uplift reported by the flash estimate for June, as employers restored jobs (prior: 78.9, market f/c: 79.0).” said Westpac about the US catalysts.

Technical analysis

Considering the previous day’s Doji formation, odds are high for the pair’s declines to 1.3600 round-figure. However, any upside beyond 1.3670 will again attack a 100-day EMA level of 1.3700 to justify the bulls’ strength.