“¢ A modest USD rebound once again helps bounce off the 1.2900 handle.
“¢ NAFTA optimism/bullish oil prices underpin Loonie and cap additional gains.
“¢ Traders now look to Canadian GDP print/US data for some fresh impetus.
The USD/CAD pair traded with a mild positive bias through the early European session on Thursday and is currently placed at session tops, around the 1.2925-30 region.
The pair continues finding some buying interest near the 1.2900 handle and for now, seems to have snapped four consecutive days of losing streak. The recent US Dollar bearish pressure now seems to have eased, especially after an upward revision of the US GDP growth figures on Wednesday and was seen as one of the key factors lending some support.
The pair has managed to recover a major part of the overnight slide, albeit a combination of factors kept a lid on any strong up-move, at least for the time being. Optimism over the revision of the North American Free Trade Agreement (NAFTA), coupled with a strong bullish sentiment around crude oil prices underpinned the commodity-linked Loonie and might continue to cap any meaningful recovery attempt.
Moreover, traders might also refrain from placing any aggressive bets and prefer to wait on the sidelines ahead of today’s release of the monthly Canadian GDP growth figures. This coupled with the US economic releases – the core PCE price index, personal income/spending data and the usual initial jobless claims will now be looked upon for some fresh impetus later during the early North-American session.
Technical levels to watch
Immediate resistance is pegged near the 1.2960 area, above which the pair is likely to aim towards reclaiming the key 1.30 psychological mark. On the flip side, a sustained break below the 1.2900 handle now seems to pave the way for an extension of the pair’s near-term bearish trajectory towards testing the very important 200-day SMA support, currently near the 1.2855-50 region.
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