USD/CAD registers small recovery gains after finding support near 1.3100
- Disappointing sales data from Canada weighs on CAD.
- WTI extends winning streak into sixth day on Thursday.
- US Dollar Index struggles to advance beyond 97.50.
After dropping to 1.3100 for the first time in six weeks on Wednesday, the USD/CAD pair staged a technical recovery on Thursday and looks to close the day with small gains above 1.3120.
CAD fails to capitalize on oil rally
Although crude oil prices continued to push higher with the barrel of West Texas Intermediate renewing its multi-month highs near $61.40, the CAD struggled to gather strength amid the disappointing data. Wholesale Sales in Canada declined by 1.1% in October to come in worse than the market expectation for a decrease of 0.1%, Statistics Canada reported on Thursday.
On the other hand, the greenback's uninspiring performance made it difficult for the pair to extend its rebound.
The Federal Reserve Bank of Philadelphia's Manufacturing Business Outlook Survey revealed that the manufacturing activity in the region was virtually flat in December with the headline Diffusion Index dropping to 0.3 from 10.4 in November. Resurfacing concerns over a protracted slowdown in the US manufacturing sector weighed on the greenback.
After rising toward the 97.50 mark earlier in the day, the US Dollar Index lost its traction and was last down 0.06% on the day at 97.34.
On Friday, Retail Sales data from Canada and the US Bureau of Economic Analysis' final estimate of the third-quarter US Gross Domestic Product (GDP) will be looked upon by the participants for a final catalyst before markets turn subdued heading into the Christmas break.
Technical levels to watch for