“¢ Renewed USD buying helps regain positive traction on Monday.
“¢ Weaker oil prices weigh on Loonie and provide an additional boost.
“¢ Diminishing BoC rate hike prospects should help limit any downside.
The USD/CAD pair regained positive traction at the start of a new trading week and recovered a major part of Friday’s corrective fall from one-year tops.
A goodish pickup in the US Dollar demand, despite escalating US-China trade tensions and the ongoing retracement in the US Treasury bond yields, was seen as one of the key factors that helped the pair to reclaim the 1.3300 handle.
This coupled with a mildly softer tone around oil prices, with WTI crude oil retreating from Friday’s near one-month tops, weighed on the commodity-linked currency – Loonie and further collaborated to the pair’s strong bid tone.
Meanwhile, Friday’s sluggish readings for both inflation and retail sales cast doubts about how quickly the Bank of Canada could proceed with future rate hikes and might now help limit any immediate sharp downside, at least for the time being.
Technical levels to watch
Immediate resistance is pegged near the 1.3320 area, above which the pair could make a fresh attempt towards reclaiming the 1.3400 handle with some intermediate resistance near the 1.3370-80 region.
On the flip side, the 1.3270-65 zone now seems to have emerged as an immediate support, which if broken might prompt some fresh long-unwinding trade and drag the pair back towards the 1.3200 handle.
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