“¢ A modest USD uptick helps stall Friday’s Canadian CPI-led downfall.
“¢ Weaker oil prices undermine Loonie and extend some additional support.
“¢ Traders look forward to a speech by BoC’s Wilkins for some fresh impetus.
The USD/CAD pair oscillated in a narrow trading range at the start of a new trading week and was seen consolidating Friday’s downfall to the 1.3050 support area.
The latest Canadian consumer inflation came in much stronger than expected and prompted some aggressive selling around the major on Friday. Accelerating inflation raised prospects for a BoC rate hike move next month and was seen as one of the key factors behind the pair’s sharp retracement from over three-week tops.
Meanwhile, a combination of positive factors – a modest US Dollar uptick and a weaker tone around crude oil prices, which tend to undermine demand for the commodity-linked currency – Loonie, eased the bearish pressure on Monday and helped the pair to defend the 1.3055-50 support zone, at least for the time being.
It, however, remains to be seen if the pair continues finding some buying interest at the mentioned support or resumes with its retracement slide as market participants now look forward to the BoC Senior Deputy Governor Carolyn Wilkins’ scheduled speech later during the early North-American session.
Investors this week will also confront the release of FOMC monetary policy meeting minutes, which along with the Fed Chair Jerome Powell’s speech at the Jackson Hole Symposium will further contribute towards determining the pair’s next leg of directional move.
Technical levels to watch
Any meaningful recovery attempt is likely to confront fresh supply near the 1.3100 handle and is followed by 50-day SMA hurdle near the 1.3135-40 region. On the flip side, weakness below mid-1.3000s now seems to pave the way for an extension of the bearish trajectory back towards testing the key 1.30 psychological mark en-route 100-day SMA support near the 1.2980-75 region.
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