“¢ Snaps three consecutive days of winning streak despite a modest USD uptick.
“¢ Bearish traders seemed rather unaffected with a mild weakness in oil prices.
“¢ Relative thin US economic docket seems unlikely to provide any meaningful impetus.
The USD/CAD pair traded with a negative bias through the early European session on Tuesday and eroded a major part of the previous session’s up-move back closer to 1-1/2 month tops.
The pair continued with its struggled to make it through the 1.3150-60 supply zone and for now, seems to have snapped three consecutive days of winning streak, despite a combination of supporting factors.
Some renewed pickup in the US Dollar demand, supported by a modest uptick in the US Treasury bond yields, did little to assist the pair to build on last week’s post-BoC goodish up-move.
Traders also seemed uninspired by a mildly negative tone around crude oil prices, which tend to undermine demand for the commodity-linked currency Loonie, and rather preferred to take some profits off the table.
It would now be interesting to see if the pair shows any resilience below the 1.3100 handle or long-unwinding trade continues exerting additional downward pressure amid relatively thin US economic docket, highlighting the release of Conference Board’s consumer confidence index.
Technical levels to watch
Any follow-through weakness is likely to find support at 100-day SMA, around the 1.3080 region, below which the fall could further get extended towards mid-1.3000s. On the flip side, the 1.3130 level now seems to act as an immediate resistance and is followed by the 1.3150-60 supply zone, which if cleared might assist the pair to climb further towards reclaiming the 1.3200 handle.
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