“¢ A strong follow-through USD buying remains supportive of the positive momentum.
“¢ A modest retracement in the US bond yields now seemed to cap additional gains.
“¢ Weaker oil prices weigh on Loonie and might continue to help limit immediate downside.
The USD/CAD pair held on to its mildly positive tone near fresh one-year highs, albeit seemed lacking any strong follow-through buying interest.
The pair seemed largely unaffected by the ongoing US Dollar upsurge, with a modest retracement in the US Treasury bond yields failing to assist the pair to capitalize on its early up-move and capping any additional gains.
Adding to this, near-term overbought conditions could also be one of the factors holding investors back from placing any fresh aggressive bullish bets and eventually led to a subdued/range-bound price action through the early European session.
The downside, however, remained cushioned amid a weaker tone surrounding crude oil prices, which tends to dampen demand for the commodity-linked currency – Loonie and hence, any meaningful slide would now be looked upon as a buying opportunity.
Traders now look forward to the release of second-tier US economic data – Philly Fed manufacturing index and the usual initial weekly jobless claims data in order to grab some short-term opportunities later during the early North-American session.
Technical levels to watch
Immediate resistance is pegged near the 1.3345-50 region, above which the pair is likely to aim towards reclaiming the 1.3400 handle with some intermediate hurdle near the 1.3370-75 zone.
On the flip side, any meaningful retracement back below the 1.3300-1.3290 region is likely to find support near the 1.3265 area, which if broken might prompt some additional long-unwinding trade.
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