“¢ The ongoing USD retracement prompts some profit-taking.
“¢ Resurgent US bond yields/subdued oil prices help limit downside.
“¢ Today’s second-tier Canadian/US data eyed for fresh impetus.
The USD/CAD pair traded with a mild negative bias through the early European session, albeit has managed to hold its neck above the 1.3100 handle.
A goodish recovery in the Turkish Lira, following the recent slump to record lows, coupled with the news of renewed US-China trade talks prompted some US Dollar profit-taking and was seen as one of the key factors behind the pair’s retracement from overnight swing high level of 1.3175, or over three-week tops.
However, resurgent US Treasury bond yields, though failed to revive the USD demand, extended some support. This coupled with a subdued action around crude oil prices, undermined the commodity-linked currency – Loonie and further collaborated towards limiting deeper losses, at least for the time being.
Moving ahead, today’s economic docket, featuring the release of Canadian Manufacturing Sales, along with housing market data, Philly Fed Manufacturing Index and the usual initial weekly jobless claims data from the US, will now be looked upon for some fresh impetus.
Technical Analysis
On Tuesday, the pair regained traction from an important horizontal support near mid-1.3000s and the positive momentum stalled near a resistance marked by short-term descending trend-channel formation on the daily chart.
Meanwhile, mixed technical indicators have failed to point towards any firm directional bias, suggesting that the pair might continue to oscillate within the mentioned range. Hence, it would be prudent to wait for a decisive break in either direction before positioning for the pair’s near-term trajectory.
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