“¢ The ongoing USD upsurge helps stall this week’s retracement slide and regain some traction.
“¢ Weaker crude oil prices undermine Loonie and further collaborate to the positive momentum.
“¢ Traders now look forward to the US monthly retail sales/oil inventories data for fresh impetus.
The USD/CAD pair caught some fresh bids on Wednesday and recovered a part of previous session’s steep fall to mid-1.3000s horizontal support.
A combination of supporting factors helped the pair this week’s sharp retracement slide from three-week tops, around the 1.3170 region touched on Monday, and regain positive traction. The US Dollar stood tall near 14-month tops and continues to benefit from safe-haven flows amid concerns about Turkey’s financial crisis.
Adding to this, a follow-through retracement in crude oil prices, weighed down by an overnight report showing a rise in the US crude inventories, further undermined demand for the commodity-linked currency – Loonie and collaborated to the positive tone surrounding the major.
Despite a goodish bounce, the pair remains below the 1.3100 handle as traders seemed to hold back from placing aggressive bets ahead of today’s important release of the US monthly retail sales data. This coupled with the official EIA report on the weekly US crude oil inventories might produce some meaningful trading opportunities.
Technical levels to watch
Any subsequent up-move is likely to confront resistance near the 1.3100 handle and is closely followed by 50-day SMA hurdle near the 1.3125 area, above which the pair is likely to aim back towards testing multi-week tops, around the 1.3170 region.
On the flip side, a sustained weakness below an important horizontal support near mid-1.3000s might now turn the pair vulnerable to drop back below the key 1.3000 psychological mark and aim towards retesting 100-day SMA support, near the 1.2975-70 region.
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