• Investors looked past Wednesday’s upbeat Canadian monthly retail sales figures.
• A modest pickup in the USD demand/wealer Oil prices extended some support.
• Short-covering ahead of FOMC meeting minutes further collaborate to the recovery.
The USD/CAD pair rallied around 35-40 pips in the last hour and recovered a major part of its early slide to near one-month lows.
With investors looking past Wednesday’s release of upbeat Canadian monthly retail sales data, some renewed US Dollar buying helped ease the bearish pressure and turned out to be one of the key factors behind the pair’s modest bounce from daily lows.
The pair managed to find decent support ahead of mid-1.3300s and was further supported by weaker sentiment around Crude Oil prices – down around 1% for the day, which tends to undermine demand for the commodity-linked currency – Loonie.
The uptick could further be attributed to some short-covering move ahead of today’s key risk – the release of minutes of the latest FOMC monetary policy meeting, which might influence the near-term USD price dynamics and provide a fresh directional impetus.
Looking at the technical picture, the pair now seems to have confirmed a near-term bearish break below a four-week-old trading range and hence, any attempted recovery might still be short-lived and seen as an opportunity to initiate some fresh bearish positions.
Technical levels to watch