“¢ The ongoing slump in crude oil prices seemed weighing heavily on Loonie.
“¢ Resurgent USD demand provides an additional boost beyond 1.32 handle.
“¢ The latest Canadian inflation figures now eyed for a fresh directional impetus.
The USD/CAD pair built on its intraday positive momentum and spiked to fresh session top, recovering all of its losses recorded in the previous session.
A combination of supporting factors helped the pair to stall this week’s sharp retracement slide from 4-1/2 month tops, witnessed over the past two trading session, and regain positive traction on the last trading day of the week.
The pair’s initial leg of an uptick from an intraday low level of 1.3184 was supported by a fresh round of sell-off in crude oil prices, which was seen as one of the key factors weighing heavily on the commodity-linked currency – Loonie.
Even as major oil producers, including Saudi Arabia, are pushing OPEC to cut oil supply by as much as 1.4 million bpd to prevent a supply glut, oil prices fell to the lowest level in a year on Friday and remained on course for their biggest one-month decline since late 2014.
This coupled with a fresh wave of US Dollar buying interest since the early European trading session, and some short-covering above the 1.3200 handle, provided an additional boost and lifted the pair to the 1.3240-50 supply zone.
Further gains, however, remained limited, at least for the time being, as market participants now seemed refraining from placing any aggressive bets ahead of the very important Canadian consumer inflation figures, due for release in a short while from now.
Technical levels to watch
On a sustained move beyond the mentioned supply zone, the pair is likely to accelerate the up-move towards reclaiming the 1.3300 handle en-route multi-month tops, around the 1.3315-20 region. On the flip side, the 1.3200 handle now seems to protect the immediate downside, which if broken might prompt some aggressive selling and drag the pair back towards weekly lows, around the 1.3140 region.
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