“¢ Resurgent USD demand helps build on this week’s rebound from 1-1/2 week lows.
“¢ Slump in oil prices weighing on the commodity-linked Loonie and remain supportive.
“¢ Focus shifts to the US macro data and Powell’s scheduled speech for fresh impetus.
The USD/CAD pair finally managed to break through the 1.2920-25 key hurdle and surged to 2-1/2 week tops, around mid-1.2900s in the last hour.
Despite a sharp fall in the US Treasury bond yields, the US Dollar buying picked up pace since the early European session and was seen as one of the key factors driving the pair higher for the fourth consecutive session.
This coupled with the ongoing slump in oil markets, with WTI crude oil tumbling to a 2-1/2 week low level of $69.00/barrel, weighed heavily on the commodity-linked currency – Loonie and further collaborated to the pair’s sharp spike over the past hour or so.
Meanwhile, possibilities of some short-term trading stops being triggered on a move beyond the 1.2920-25 region, which has been acting as a strong hurdle over the past two weeks or so, further assisted the pair to build on this week’s sharp rebound from 1.2745 area, 1-1/2 week lows set on Tuesday.
Next in focus would be the release of US durable goods orders, a key highlight from today’s US economic docket, which along with a scheduled speech by the Fed Chair Jerome Powell would now be looked upon for fresh bullish impetus.
Technical levels to watch
A follow-through buying interest now seems to continue boosting the pair further towards reclaiming the key 1.30 psychological mark en-route its next resistance near the 1.3040-45 supply zone. On the flip side, the 1.2925-20 region now becomes an immediate support to defend, which if broken might accelerate the slide towards 1.2885-80 horizontal support before the pair eventually drops to test 50-day SMA support near the 1.2820-15 region.
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