“¢ Renewed USD weakness prompts some fresh selling on Monday.
“¢ The relief rally in oil prices underpin Loonie and add to the weaker tone.
“¢ A sustained break below 1.3185 support needed for bearish confirmation.
The USD/CAD pair held on to its weaker tone through the early North-American session, albeit has recovered over 30-pips from daily lows.
The pair continued showing some resilience at lower levels and once against, for the third straight session, managed to find some support near the 1.3185 region. However, a combination of factors – renewed US Dollar weakness and a goodish rebound in oil prices, kept a lid on any meaningful up-move, at least for the time being.
Growing speculations that the Fed might pause the rate hike cycle as early as in spring 2019 prompted some fresh USD weakness at the start of a new trading week. Adding to this, reviving risk appetite, as depicted by strong gains across global equity markets, further dented demand for traditional safe-haven currencies and kept the USD bulls on the defensive.
Meanwhile, a strong relief rally in crude oil prices, following the previous session’s slump of nearly 8%, against the backdrop of Friday’s upbeat Canadian macro data – consumer inflation and monthly retail sales data, underpinned the commodity-linked Loonie and collaborated to the pair’s intraday slide.
Given the negative factors, the pair’s modest rebound from session low level of 1.3187 seemed lacking any obvious catalyst and hence, runs the risk of meeting with some fresh supply at higher levels amid absent relevant market moving economic releases, either from the US or Canada.
Technical levels to watch
Any subsequent up-move beyond the 1.3230-35 immediate resistance is likely to confront some fresh supply near the 1.3260 region, above which the pair seems all set to aim towards reclaiming the 1.3300 round figure mark. On the flip side, the 1.3185 zone might continue to protect the immediate downside, which if broken might turn the pair vulnerable to accelerate the fall towards the 1.3125 intermediate support en-route the 1.3100 handle.
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