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   “¢   Struggles to build on overnight rebound amid renewed USD weakness.
   “¢   Weaker oil prices/positive US bond yields do little to lend any support.

   “¢   Focus remains on the advance US Q2 GDP growth figures.  

The USD/CAD pair met with some fresh supply on Friday and eroded a major part of overnight modest recovery gains.  

Currently hovering around mid-1.3000s, the pair stalled its positive momentum just ahead of the 1.3100 handle and struggled to make it through/sustain above 50-day SMA. Some renewed US Dollar weakness, despite a mildly positive US Treasury bond yields, was seen as one of the key factors prompting some fresh selling on the last trading day of the week.  

Even the prevalent negative trading sentiment around crude oil prices, which tend to undermine demand for the commodity-linked currency – Loonie, did little to lend support, albeit seemed to help limit any deeper losses, at least for the time being.

Moving ahead, investors’ focus will remain glued to the advance US Q2 GDP growth figures, where any positive surprise, over and above already elevated expectations, should boost the greenback and assist the pair to regain some positive traction. Nevertheless, the pair still remains on track to the end with the second consecutive week of losses and possibly the lowest weekly close since early June.  

Technical levels to watch

The 1.3025 region might continue to act as an immediate support, which if broken might turn the pair vulnerable to break below the key 1.30 psychological mark and head towards testing its next support near the 1.2970-65 region.

On the flip side, the 1.3090-1.3100 region, closely followed by the 1.3125 area now seems to act as an immediate hurdle, above which a bout of short-covering is likely to assist the pair to aim towards reclaiming the 1.3200 handle.