USD/CAD struggles around weekly top near 1.3500 as softer Oil price jostles with USD retreat

• USD/CAD clings to mild losses near one-week high after rising the most on a day since early March.
• Downbeat Oil price, firmer US Dollar previously favored Loonie pair buyers amid risk-off mood.
• Market’s consolidation fails to inspire USD/CAD bears as WTI crude oil remains downbeat.
• US inflation clues, debt ceiling updates and banking news eyed for clear directions.

USD/CAD bulls take a breather around 1.3490 amid early Friday, after posting the biggest daily jump in nine weeks the previous day. In doing so, the Loonie pair fails to cheer the US Dollar’s retreat as the Oil price remains bearish. Also keeping the buyers hopeful is the cautious mood ahead of the US inflation clues, as well as challenges to sentiment emanating from the US debt ceiling talks and banking fallouts.

WTI crude oil price remains pressured at the weekly low, near $70.60 by the press time, down for the third consecutive day as economic fears join the firmer US Dollar to weigh on the commodity prices. That said, recently downbeat inflation data from China, the world’s biggest commodity user, join the looming fears of US default and banking fallouts to exert downside pressure on the black gold prices.

On the other hand, the US Dollar Index (DXY) retreats from a one-week high to 102.00 after posting the biggest daily gains in two months the previous day despite mostly downbeat prints of the US Producer Price Index (PPI) and Initial Jobless Claims. It should be noted that the hawkish comments from Minneapolis Fed President Neel Kashkari joined the postponement of the debt ceiling talks between US President Joe Biden and House Speaker McCarthy and a slump in the share price of PacWest Bancorp to favor the US Dollar bulls.

Elsewhere, expectations of recovery in China inflation data and hopes of witnessing softer US inflation clues join an absence of fresh disappointment from the US banking, debt-ceiling front to underpin the market’s latest corrective bounce.

While portraying the mood, the US stock futures print mild gains while the Asia-Pacific equities grind higher amid downbeat US Treasury bond yields.

Looking ahead, a light calendar in Canada allows the USD/CAD traders to concentrate on preliminary readings of the University of Michigan’s (UoM) Consumer Sentiment Index (CSI) for May, as well as the UoM 5-year Consumer Inflation Expectations for the said month, for possible moves.

Technical analysis

Despite the previous day’s run-up, USD/CAD stays on the bear’s radar unless providing a daily closing beyond the 100-DMA hurdle of around 1.3520.