• USD/CAD catches fresh bids and climbs to a one-month high amid broad-based USD strength.
• The softer US PCE Price Index fails to impress the USD bulls or provide any meaningful impetus.
• An intraday bounce in Oil prices underpins the Loonie and contributes to cap gains for the pair.

The USD/CAD pair regains positive traction following the previous day's downfall and climbs to a fresh one-month top, around the 1.3665-1.3670 area during the early North American session on Friday. Spot prices, however, trim a part of the intraday gains and retreat below mid-1.3600s in reaction to the mixed US macro data.

In fact, the US Bureau of Economic Analysis reported that the Personal Consumption Expenditures (PCE) Price Index declined more-than-expected, to the 4.2% YoY rate in March from 5.1% previous. The Core PCE Price Index (the Fed's preferred inflation gauge), meanwhile, edged lower to 4.6% from 4.7% as compared to consensus estimates for a fall to 4.5%. In the absence of any big surprises, the US Dollar (USD) fades an intraday bullish spike to a two-and-half-week high amid a steep decline in the US Treasury bond yields and turns out to be a key factor acting as a headwind for the USD/CAD pair.

Apart from this, a modest intraday rebound in Crude Oil prices underpins the commodity-linked Loonie and further contributes to capping gains for the USD/CAD pair, at least for the time being. The Canadian Dollar (CAD), however, struggles to gain any meaningful traction in the wake of the softer domestic GDP report, which showed that the economy grew by 0.1% in February as compared to the 0.6% increase reported in the previous month. This, in turn, suggests that the path of least resistance for spot prices is to the upside and any corrective pullback is more likely to get bought into.

Technical levels to watch