“¢ Easing US-China trade tensions provide an additional boost to the already stronger USD.
“¢ Bullish oil prices underpin the commodity-linked Loonie and now seemed to cap gains.
“¢ This week’s important US releases might help investors determine the near-term trajectory.
The USD/CAD pair now seems to have entered a bullish consolidation phase and was seen oscillating in a narrow trading range, just below the 1.2900 handle.
With investors looking past Friday’s lacklustre Canadian consumer inflation figures and core retail sales figures, a combination of diverging forces failed to provide any fresh impetus and led to a range-bounce/subdued price action at the start of a new trading week.
The ongoing US Dollar upsurge got an additional boost after the US Treasury Secretary Steven Mnuchin said that Trump administration would put the US-China trade war on hold.
The positive factor, to a large extent, was negated by the prevalent strong bullish sentiment surrounding crude oil prices, which underpinned demand for the commodity-linked currency – Loonie and capped any further up-move.
Moving ahead, there aren’t any major market-moving economic releases due from Canada and hence, the key focus would be on this week’s important US releases, including the latest FOMC meeting minutes and durable goods orders.
This along with speeches from influential FOMC members would be looked upon for some fresh clues over the central bank’s near-term monetary policy outlook and might eventually help investors determine the pair’s next leg of directional move.
Technical levels to watch
Bulls would be eyeing for a convincing breakthrough the 1.2900-1.2910 immediate resistance, above which the pair is likely to head towards challenging the 1.2945-50 supply zone before eventually darting towards the key 1.30 psychological mark.
On the flip side, the 1.2830 region (50-day SMA) now seems to act as an immediate strong support, which if broken might drag the pair back below the 1.2800 handle towards retesting the 1.2765-60 horizontal support.
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