USD/CAD extends earlier pullback despite weak oil prices

• USD/CAD sellers concentrate more on US Dollar (USD) decline, upbeat Canadian Manufacturing PMI than oil prices.
• Second-tier data and trade headlines can direct near-term moves.

Although prices of Canada’s key export item crude oil are declining, the USD/CAD pair carries its recent downturn overnight as it takes the rounds to 1.3100 amid Wednesday’s initial Asian session.

Traders assume the USD weakness as the key reason behind the declines. With the US-EU trade tension in action, the greenback had to forgo previous gains backed by US-China truce.

Better than expected 49.0 to 49.2 figure of Canada’s Markit Manufacturing Purchasing Managers’ Index (MI) can also be considered as the Canadian Dollar (CAD) supportive.

Crude oil fails to justify the latest geopolitical tension between the US and Iran, coupled with global oil producers’ accord for supply cut extension.

ADP Employment Change, ISM Non-Manufacturing PMI, Factory Orders and Trade Balance could decorate the US economic calendar today while Canada’s trade numbers may represent the other side of the end.

While US numbers are likely flashing mixed results, an expected increase in Canada’s trade deficit might hinder further declines of the pair.

Technical Analysis

Unless breaking 1.3068/60 area comprising lows marked during last five-months, chances of the pair slump to 1.3000 seem fewer, which in turn highlights the odds favoring the quote’s pullback to 1.3150 and 1.3210 resistances.