“¢ Renewed weakness in oil prices undermine Loonie and extends some support.
“¢ A follow-through USD selling bias does little to provide any additional boost.
“¢ Investors now eye Canadian inflation figures for a fresh directional impetus.
The USD/CAD pair caught some bids on Friday and recovered a part of previous session’s slide, albeit seemed struggling to build on the momentum further beyond the 1.3200 handle.
Despite thin liquidity conditions on the back of the Thanksgiving holiday in the US, the pair extended this week’s sharp retracement slide from 4-1/2 month tops and kept losing ground for the second consecutive session on Thursday.
The initial leg of the slide was led by some long-unwinding trade amid a follow-through US Dollar selling bias and aggravated further in wake of a goodish rebound in crude oil prices, which tend to underpin demand for the commodity-linked currency – Loonie.
Speculations that the Fed might pause the rate hike cycle as early as spring 2019 kept exerting downward pressure on the greenback through the Asian session on Friday, albeit renewed selling around oil markets extended some support to the major and helped limit any further losses.
The uptick, however, seemed lacking any strong conviction as market participants preferred to wait on the sidelines ahead of today’s key release of the Canadian consumer inflation figures, due later during the early North-American session.
Technical levels to watch
Momentum above the 1.3200 handle is likely to confront some fresh supply near the 1.3225-30 region, which if cleared might prompt some short-covering move and assist the pair to aim towards reclaiming the 1.3300 handle.
On the flip side, the 1.3180 level now seems to protect the immediate downside and is followed by support near the 1.3140-35 region, below which the pair is likely to accelerate the fall towards the 1.3100 round figure mark.
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