“¢ Overnight rebound quickly fizzles out, despite a modest USD uptick.
“¢ Positive oil prices underpin Loonie and further add to the selling bias.
“¢ Focus shifts to the latest FOMC monetary policy update, later today.
After an initial uptick to the 1.3125 region, the USD/CAD pair met with some fresh supply and is currently holding with modest daily losses for the second consecutive session.
The pair failed to capitalize on overnight goodish rebound from closer to weekly lows, with a positive tone around crude oil prices underpinning the commodity-linked currency – Loonie and exerting some fresh downward pressure on the major.
Meanwhile, investors looked past the US midterm election results and a goodish pickup in the US Treasury bond yields helped revive the US Dollar demand, albeit did little to provide any fresh bullish impetus, at least for the time being.
It would now be interesting to see if bullish traders continue to show resilience below 100-day SMA or the current pull-back marks the end of the pair’s recent uptrend from over four-month lows, touched on October 1.
Moving ahead, today’s key focus will be on the latest FOMC monetary policy update, where the central bank is widely anticipated to maintain status-quo but indicate that it remains on track to raise interest rates for the fourth time this year in December.
Technical levels to watch
Any subsequent weakness below the 1.3080-70 region (100-DMA) might continue to find support near mid-1.3000s, which if broken is likely to accelerate the fall back towards the key 1.30 psychological mark.
On the flip side, the 1.3125 region now seems to have emerged as an immediate resistance and is closely followed by the 1.3160-65 supply zone, above which the pair is likely to aim towards reclaiming the 1.3200 handle.
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