“¢ A modest USD rebound helps rebound from the 1.3100 neighborhood.
“¢ Weaker oil prices weigh on Loonie and provide an additional boost.
“¢ Further gains remain capped ahead of this week’s important releases.
The USD/CAD pair struggled to build on its attempted recovery from 2-1/2 week lows but has still managed to hold with modest daily gains around mid-1.3100s.
The pair stalled its downward trajectory and found some support ahead of the 1.3100 handle. A pickup in the US Dollar demand was seen as one of the key factors behind the pair’s goodish rebound of around 50-pips from an intraday low level of 1.3112.
This coupled with a modest retracement in crude oil prices, which tends to undermine demand for the commodity-linked currency – Loonie provided an additional boost and lifted the pair to an intraday high level of 1.3161.
The up-move, however, lacked any strong follow-through amid holiday-thinned liquidity conditions on the back of the Independence Day holiday in the US. Moreover, investors also seemed to refrain from aggressive bets and preferred to wait on the sidelines ahead of this week’s heavyweight releases.
This week’s economic docket features the release of latest FOMC meeting minutes, which coupled with monthly jobs report from the US and Canada might assist investors to determine the pair’s next leg of directional move.
Technical levels to watch
Immediate resistance is pegged near the 1.3180 level and is closely followed by the 1.3200 handle, above which a bout of short-covering could lift the pair back towards 1.3265 supply zone. On the flip side, the 1.3115-10 area might continue to protect the immediate downside, which if broken might accelerate the downfall further towards 1.3070-65 support zone.
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