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  • USD/CAD attracted some dip-buying near mid-1.3100s and moved back closer to session tops.
  • A sharp intraday turnaround in crude oil prices undermined the loonie and remained supportive.
  • The USD bulls remained depressed despite hotter-than-expected US CPI and capped the upside.

The USD/CAD pair recovered around 45 pips from daily lows, albeit seemed struggling to extend the momentum and remained capped below the 1.3200 mark.

The pair failed to capitalize on the previous day’s goodish positive move of around 80 pips and met with some fresh supply on the last day of a new trading week. The USD/CAD pair dropped to an intraday low level of 1.3151 and was being pressured by a weaker tone surrounding the US dollar.

The greenback remained depressed through the early North American session amid uncertainty over the next round of the US fiscal stimulus measures and a pickup in the shared currency. The USD bulls failed to gain any respite from Friday’s hotter-than-expected US CPI print for August.

Adding to this, a strong opening in the US equity markets further dented the greenback’s relative safe-haven status and weighed on the USD/CAD pair. However, a sharp intraday fall in crude oil prices undermined the commodity-linked loonie and extended some support to the major.

The uptick, however, lacked any strong follow-through and the USD/CAD pair held well within a broader trading range over the past three days or so. This makes it prudent to wait for a sustained move in either direction before traders start positioning for any meaningful intraday momentum.

Meanwhile, bulls are likely to wait for some follow-through buying beyond the 1.3200 mark, above which the USD/CAD pair seems all set to climb back to weekly tops, around the 1.3260 region. Conversely, weakness below mid-1.3100s might turn the pair vulnerable to break below the 1.3100 mark.

Technical levels to watch