“¢ A combination of factors kept exerting downward pressure on Wednesday.
“¢ Further downside remained cushioned amid holiday-thinned liquidity conditions.
The USD/CAD pair has managed to recover early lost ground to 2-1/2 week lows and is currently placed near the top end of its narrow daily trading range, just below mid-1.3100s.
The pair extended last week’s sharp retracement slide from one-year tops and kept losing ground on Wednesday. The pair touched an intraday low level of 1.3112 and was further weighed down by a modest US Dollar retracement.
The USD weakness remained unabated through the Asian session on Wednesday, with the ongoing bullish run in crude oil prices underpinning the commodity-linked currency – Loonie and further collaborating to the pair’s downfall to the lowest level since mid-June.
The selling bias, however, now seems to have abated, at least for the time being, as traders seemed to refrain from placing aggressive bets amid holiday-thinned liquidity conditions and ahead of this week’s important US releases, including the latest FOMC meeting minutes and the keenly watched monthly jobs report.
Technical levels to watch
Any subsequent up-move is likely to confront resistance near the 1.3180 level and is closely followed by the 1.3200 handle. On the flip side, the 1.3110-1.3100 region might continue to protect the immediate downside, which if broken is likely to accelerate the fall towards 1.3065-60 support area.
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