“¢ Resurgent USD demand fails to provide any fresh bullish impetus.
“¢ Traders even shrugged off the ongoing slump in oil prices.
After an initial dip to 1.2970 area, the USD/CAD pair regains some traction and might now again be looking to build on its momentum beyond the key 1.30 psychological mark.
On Monday, the pair did attempt a move beyond the mentioned handle and jumped its highest level since March 21. The up-move, however, lost momentum during the NY trading session and the pair retreated around 30-pips from an intraday high level of 1.3022.
The pair now seems to have entered a consolidation phase and has failed to extract any support from resurgent US Dollar demand. Even a sharp follow-through weakness in crude oil prices, which tends to undermine demand for the commodity-linked currency – Loonie, did little to provide any fresh bullish impetus.
Traders seemed to track the ongoing slump in the US Treasury bond yields, with reluctance to place aggressive bets, ahead of this week’s key event risks, further collaborating to the range-bound subdued price action through the early European session on Tuesday.
The BoC is scheduled to announce its latest monetary policy decision, which along with the release of keenly watched US non-farm payrolls data would help investors determine the pair’s next leg of directional move.
Technical levels to watch
On a sustained move beyond the 1.30 handle, leading to a subsequent strength above 1.3020-25 area now seems to lift the pair towards 1.3045-50 intermediate resistance en-route its next major hurdle near the 1.3090-1.3100 region.
On the flip side, any meaningful retracement is likely to find support near mid-1.2900s, which if broken might prompt some fresh long-unwinding trade and drag the pair further towards the 1.2900 handle en-route the 1.2875-70 support area.
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