“¢ The USD recovery move loses steam and keeps a lid on any further up-move.
“¢ Subdued oil price-action does little to influence the commodity-linked Loonie.
The USD/CAD pair stalled its positive momentum just ahead of the 1.3200 handle and has now retreated to the lower end of its daily trading range.
A goodish pickup in the US Treasury bond yields helped the US Dollar to recover a part of its steep decline, led by the US President Donald Trump’s comments last week, and assisted the pair to catch some bids at the start of a new trading week.
The USD up-move, however, seemed losing steam during the early European session and eventually kept a lid on any strong follow-through momentum as investors remained mindful of Trump’s displeasure over the Fed’s monetary tightening.
Meanwhile, a subdued action around crude oil prices did little to influence demand for the commodity-linked currency – Loonie, with the USD price dynamics turning out to be an exclusive driver of the pair’s momentum on Tuesday.
Today’s US economic docket features the release of flash manufacturing and services PMI print for July but seems unlikely to provide any meaningful impetus. Moving ahead, this week’s important US macro data – durable goods orders and advance GDP growth figures, might now help investors determine the pair’s next leg of directional move.
Technical levels to watch
The 1.3200 handle might continue to act as an immediate resistance, above which the pair is likely to head back towards 1.3240 intermediate resistance en-route the 1.3280-85 supply zone.
On the flip side, the 1.3155 area now seems to protect the immediate downside, which if broken might turn the pair vulnerable to retest 1.3115 support before eventually dropping to 50-day SMA support near the 1.3090-85 region.
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