“¢ Resurgent USD demand helps to gain some positive traction on Monday.
“¢ BoC rate hike prospects now seemed to cap any meaningful up-move.
“¢ Traders eye US ISM manufacturing PMI for some short-term impetus.
The USD/CAD pair’s attempted recovery move failed ahead of the 1.3200 handle, with bulls just managing to hold with modest daily gains.
With investors looking past Friday’s better-than-expected Canadian GDP print, coming in to show m/m growth of 0.1% in April, resurgent US Dollar demand helped the pair to gain some positive traction at the start of a new trading week.
This coupled with a modest retracement in crude oil prices, which tends to dent demand for the commodity-linked currency – Loonie provided an additional boost and lifted the pair to an intraday high level of 1.3189.
The up-move, however, lacked any strong conviction amid firming prospects for a BoC rate hike in July, which might continue to underpin the Canadian Dollar and keep a lid on any meaningful up-move for the major, at least for the time being.
Moving ahead, today’s release of US ISM manufacturing PMI will be looked upon for some short-term trading opportunities during the early North-American session. Meanwhile, the Canadian markets will be closed in observance of Canada Day and hence, holiday-thinned liquidity conditions might lead to some unusual volatility later in the day.
Technical levels to watch
Immediate support is pegged near the 1.3140-30 region, below which the pair is likely to accelerate the fall towards the 1.3100 handle en-route the 1.3065-60 support area. On the flip side, the 1.3190-1.3200 region now seems to act as an immediate hurdle, which if cleared might trigger a short-covering bounce towards 1.3265-70 supply zone.
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