USD/CAD depicts market’s anxiety above 1.3500 amid sluggish Oil price, US Dollar, Fed Chair Powell eyed

• USD/CAD lacks momentum after reversing from three-month high.
• Cautious mood ahead of top-tier US data, central bankers’ speech at Jackson Hole symposium prod Loonie traders.
• Receding fears of higher rates superseded mixed Canada Retail Sales to lure pair bears.
• US Durable Goods Orders, Fed Chair Powell’s defense of hawkish policy eyed for clear directions.

USD/CAD bears struggle to keep the reins after returning to the table the previous day, following the Loonie pair’s U-turn from a three-month high. That said, the quote remains indecisive around 1.3520 amid early Thursday morning in Europe.

In doing so, the Loonie pair portrays the market’s cautious mood ahead of a slew of US data and the start of a two-day-long annual Jackson Hole Symposium. Furthermore, dicey Oil prices and the US Dollar’s lackluster moves also challenged the USD/CAD traders of late.

US Dollar Index (DXY) remains sidelined around 103.40 after reversing from an 11-week high the previous day whereas the WTI crude oil, Canada’s main export item, prints mild losses around $78.40 while fading the bounce off a one-month low marked on Wednesday.

It should be noted that a heavy draw of Oil inventories, per the weekly stockpile data from the US Energy Information Administration (EIA), contrasts with the market’s fears of lesser energy demand due to the latest downbeat PMIs to trouble the traders of Oil and USD/CAD.

On the same line, the US statistics came in mostly weak but the Canadian data weren’t impressive, which in turn spoils the market’s outlook about the USD/CAD pair, despite recently easing fears of higher rates that called bears the previous day.

On Wednesday, preliminary readings of the US S&P Global Manufacturing PMI dropped to 47.0 for August from 49.0 versus 49.3 market forecasts whereas the Services counterpart also edged lower to 51.0, compared to 52.2 expected and 52.3 marked the previous month. With this, the S&P Global Composite PMI for the US eased to 50.4 for the said month from 52.0 prior and the analysts’ estimations. Further, US New Home Sales change rose to 4.4% MoM for July versus -2.5% previous readings.

At home, Canada’s Retail Sales for June reprinted 0.1% MoM revised growth versus the market consensus of 0.0% while the Retail Sales ex Autos slumped to -0.8% from -0.3% prior figures (revised) and 0.3% market forecasts.

While portraying the market’s mood, S&P500 Futures rose half a percent to 4,470 by the press time, after rising the most in a month the previous day. Also, the US 10-year Treasury bond yields seesaw around 4.20%, pausing a two-day losing streak from the highest level since 2007, following the biggest daily slump in three weeks.

Moving ahead, the US Durable Goods Orders, Chicago Fed National Activity Index, Kansas Fed Manufacturing Activity and weekly Jobless Claims are the key data on the watch. Above all, Fed Chairman Jerome Powell’s defense of the hawkish monetary policy will be crucial to watch for clear directions as the latest US data suggest the nearness to the end of the rate hike cycle, which if confirmed could weigh on the US Dollar and favor the Loonie pair sellers.

Technical analysis

A daily closing below a three-week-old rising support line, now immediate resistance around 1.3545, keeps the USD/CAD sellers hopeful.