“¢ USD retreats a bit from tops and exerts some downward pressure.
“¢ Softer oil prices countering USD fall and might help limit further downside.
The USD/CAD pair extended overnight retracement from fresh one-year tops and traded with a mild negative bias through the early European session.
With investors looking past overnight comments by the BoC Governor Stephen Poloz, which kept market participants guessing on July rate hike move, a modest US Dollar retracement from highs was seen as one of the key factors weighing on the major.
The downside, however, remained cushioned amid a modest retracement in crude oil prices, which dropped away from Wednesday’s three-and-a-half-year highs and kept a lid on any meaningful up-move for the commodity-linked currency – Loonie.
Despite a modest pull-back, the pair remains within a broader trading range held over the past one-week or so and hence, traders are likely to wait for a decisive break in either direction before positioning for the near-term trajectory.
With the USD price dynamics turning out to be an exclusive driver of the pair’s momentum, the release of final US Q1 GDP growth figures will now be looked upon for some fresh impetus later during the early North-American session.
Technical levels to watch
Any meaningful slide below the 1.3300 handle is likely to find support near the 1.3270-65 region, which if broken might prompt some additional long-unwinding trade and continue dragging the pair lower.
On the flip side, momentum back above mid-1.3300s might continue to confront strong hurdle near the 1.3385 area, above which the pair seems all set to aim towards testing the 1.3435 resistance.
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