USD/CAD finds support before testing 1.33, looks to close week in red

• WTI clings to daily gains above $64.
• Consumer confidence weakens in the U.S.
• US Dollar Index remains on track to finish the week below 97.

The USD/CAD pair failed to break above the 1.34 mark on Thursday and reversed its direction today as the commodity-related loonie gathered strength on rising crude oil prices. However, with the trading action turning subdued in the last couple of hours, the pair started to consolidate its daily losses and was last seen trading at 1.3325, where it was around 10 pips above the daily low and down 0.4% on the day. 

Following a technical drop to $63.30 yesterday, the barrel of West Texas Intermediate climbed, once again, above the $64 handle and is now looking to close the week $1 higher at $64.25. The weekly report published by the GE's Baker Hughes Energy Services today showed that the total number of active oil rigs in the U.S. rose to 833 from 831 last week and caused the WTI to retreat modestly from its session high of $64.60.

On the other hand, the US Dollar Index, which was able to recover the losses it suffered after the FOMC confirmed its cautious stance in its meeting minutes on Wednesday, struggled to preserve its momentum with the greenback having a tough time finding demand in today's risk-on market environment.

Additionally, the University of Michigan in its advanced estimate said that the Consumer Confidence Index was expected to drop to 96.9 in April from 98.4 in March and further weighed on the currency. As we approach the end of the week, the DXY is losing 0.22% and 0.42% on a daily and weekly basis, respectively.

What to watch next week

Previewing next week's macro events in Canada, "The Spring Business Outlook Survey will set the tone into the April BoC decision and is likely to reinforce the downbeat narrative that has permeated markets since late-2018. BOS indicators should continue to flag labour shortages, but a murkier global backdrop will weigh on investment intentions and future sales growth," TD Securities analysts said.

Technical levels