“¢ The USD fails to capitalize on the overnight up-move despite positive US bond yields.
“¢ A modest uptick in oil prices underpin Loonie and prompt some long-unwinding trade.
“¢ A sustained move above 1.3365-70 zone needed to confirm any further near-term gains.
The USD/CAD pair held on to its weaker tone through the mid-European session and is currently placed at the lower end of its daily trading range, around the 1.3310 region.
A combination of negative forces failed to assist the pair to make it through the 1.3365-70 supply zone for the third consecutive session, rather prompt some long-unwinding trade and trim a part of its weekly gains
Despite a modest pickup in the US Treasury bond yields, the US Dollar struggled to build on the overnight positive momentum and kept a lid on the pair’s recent up-move to near three-week tops set yesterday.
Adding to this, a mildly positive trading sentiment around crude oil prices underpinned the commodity-linked currency – Loonie and further collaborated to the pair’s intraday slide to the 1.3300 neighborhood.
Oil prices rose on Friday amid concerns over oil supply disruption after the US signalled that it could impose sanctions on Venezuela’s oil exports as the country descends further into political and economic turmoil.
It would now be interesting to see if the pair is able to find any support at lower levels or the current pull-back marks the end of the recent bounce from 100-day SMA support amid absent relevant economic releases,
Technical levels to watch
Weakness below the 1.3300 handle could get extended towards the 1.3275 horizontal support, which if broken might turn the pair vulnerable to slide further towards retesting 100-day SMA, around the 1.3200-1.3195 region.
On the flip side, the 1.3365-75 region might continue to act as an immediate hurdle, above which a bout of short-covering has the potential to lift the pair further beyond the 1.3400 handle towards 1.3440-45 supply zone.
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