USD/CAD eases from tops, once again fails ahead of 1.3200 handle

• The USD held steady near two-month tops post-upbeat US consumer confidence data.
• Positive Oil prices underpinned Loonie and seemed to be the only factor capping gains.

The USD/CAD pair picked up the pace in the last hour and spiked to fresh session tops, albeit struggled to extend the momentum towards reclaiming the 1.3200 handle.

Following a rather subdued trading action at the start of a new trading week, the pair managed to regain some positive traction on Tuesday and was being supported by the prevalent bullish sentiment surrounding the US Dollar.

With investors looking past Tuesday’s softer US core PCE price index, the greenback held steady near two-month tops after the Conference Board’s Consumer Confidence Index surpassed even the most optimistic estimates.  

The index jumped to 135.7 in July as compared to a rise to 125.1 expected from the previous month’s upwardly revised reading of 124.3, though the pair lacked any strong follow-through amid positive Oil prices.

WTI Crude held on to its modest daily gains above the $57.00/barrel handle – marking its fourth day of a rise in the previous five, which underpinned demand for the commodity-linked currency – Loonie and capped the major.

Hence, it will be prudent to wait for a strong follow-through buying before confirming that the pair might have already bottomed out in the near-term and positioning for a further appreciating move beyond the 1.3200 handle.

Technical levels to watch