“¢ Subdued USD demand keeps the bulls on the defensive.
“¢ Weaker oil prices undermine Loonie and helped limit downside.
“¢ Traders now eye the US retails sales data for fresh impetus.
The USD/CAD pair extended Friday’s retracement slide from the 1.3210 supply zone and traded with a mild negative bias through the early European session on Monday.
The pair continued with its struggled to sustain/build on its momentum above the 1.3200 handle, with a modest US Dollar profit-taking, following a setback from import prices and consumer confidence data, prompting some fresh selling on Friday.
The USD bulls remained on the back-foot and kept exerting some downward pressure at the start of a new trading week, albeit sliding crude oil prices, which tends to undermine demand for the commodity-linked currency – Loonie, helped limit deeper losses.
Currently holding weaker below mid-1.3100s, investors focus now shifts to the US economic docket, highlighting the release of US monthly retail sales data and Empire State Manufacturing Index. This coupled with the Fed Chair Jerome Powell’s testimony on the Semiannual Monetary Policy Report, on Tuesday and Wednesday, might help determine the next leg of directional move.
Technical levels to watch
Immediate support is pegged near the 1.3110-1.3100 region, below which the pair is likely to retest the 1.3065-60 zone before eventually dropping to test 50-day SMA support near the 1.3040 area.
On the flip side, the 1.3200-1.3210 region might continue to act as an immediate strong hurdle, above which the pair is likely to accelerate the up-move towards 1.3265 intermediate support zone en-route the 1.3300 handle.
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