USD/CAD holds near 1.3350 as Loonie consolidates gains

• Canadian dollar: best performer among majors on Friday boosted by economic data and crude oil prices. 
• USD/CAD: worst day since February 22.

The USD/CAD pair is about to end the week hovering around 1.3360, posting a daily loss of around 60 pips, the biggest slide since mid-February. The loonie recovered sharply, making a reversal from 3-week lows. 

The loonie jumped across the board following the Canadian GDP report that surpassed expectations. The economy expanded 0.3% in January while market consensus pointed to a flat reading. “Outside of energy, growth picked up nicely with GDP excluding oil and gas up 0.5% in the month and 2% over the last year. Overall, today’s data remain consistent with our view that the economy’s soft patch over Q4/18 and Q1/19 will prove transitory”, said Josh Nye, Senior Economist at RBC Economics Research.

Another positive contribution to the loonie on Friday were crude oil prices. The WTI rose above $60.00 to the highest in four months. Regarding the US dollar, it is up versus European currencies and the yen but is falling against commodity and emerging market currencies. Data from the US came in mixed (soft PCE price index and upbeat housing data) not helping the dollar. 

Levels to watch 

The USD/CAD bottomed at 1.3340, the lowest in a week and then bounced modestly to the upside during the American session. It rose to 1.3372 before losing strength and pulling back to 1.3360, level located below Tuesday’s low. The chart of the current week shows a potential double top at 1.3440. The neckline is seen at 1.3360, so a consolidation below could point to further losses.