USD/CAD holds steady above 1.3200 handle, lacks follow-through

• The USD stages a modest bounce from over one-month lows.
• Sliding Oil prices undermined the Loonie and remain supportive.
• Thursday’s second-tier US/Canadian data eyed for a fresh impetus.

The Greenback edged higher against its Canadian counterpart and helped the USD/CAD pair to move away from weekly lows set in the previous session.
 
The pair continued showing some resilience below the 1.3200 round-figure mark and a combination of supporting factors helped it to gain some positive traction during the Asian session on Thursday. As investors looked past Wednesday’s disappointing release of the US monthly retail sales figures, a modest US Dollar rebound from over one-month lows extended some support to the major.

Modest USD uptick/weaker oil prices supportive

On the other hand, the commodity-linked currency – Loonie was weighed down by a fall in Crude Oil prices, led by a sharp rise in the US stockpiles. The American Petroleum Institute (API) reported on Wednesday that inventories rose by 10.5 million barrels to 432.5 million barrels for the week ended Oct. 11, which added to renewed concerns about a further escalation of the US-China trade war.
 
Given that market participants might have already started pricing in prospects for yet another interest rate cut by the Fed in October, any subsequent move up might continue to face some fresh supply ahead of the very important 200-day SMA. Hence, it will be interesting to see if the pair is able to capitalize on the uptick or remains confined well within a broader trading range held since the beginning of this week.
 
In the meantime, Thursday economic docket – featuring the release of Canadian manufacturing sales, along with Philly Fed manufacturing index and housing market data from the US – will be looked upon for some short-term trading impetus later during the early North-American session.

Technical levels to watch