“¢ A combination of supporting factors continues to underpin the Canadian Dollar.
“¢ The USD bullish momentum took a brief pause and prompted some selling.
The USD/CAD pair surrendered early tepid recovery gains to 1.2840 area and is now headed towards the lower end of its daily trading range.
A last-minute US-Canada deal to replace the North American Free Trade Agreement continued underpinning the Canadian Dollar. This coupled with the ongoing upsurge in crude oil prices further benefitted the commodity-linked currency – Loonie and kept a lid on the pair’s early attempted recovery move from over four-month lows touched in the previous session.
Meanwhile, the latest leg of sudden decline over the past hour or so could further be attributed to a modest US Dollar, which took some breather after today’s strong upsurge beyond the key 95.00 psychological mark to near four-week tops.
It would now be interesting to see if the pair continues to find some support near the 1.2800 handle amid absent relevant market moving economic releases, either from the US or Canada. Later during the US session, the Fed Chair Jerome Powell’s scheduled speech will be looked upon for some short-term trading impetus.
Technical levels to watch
Weakness back below the 1.2800 mark, leading to a subsequent break through 1.2780 level (overnight multi-month lows) is likely to accelerate the slide towards 1.2735 intermediate support en-route the 1.2700 handle.
On the flip side, the 1.2840-50 region now seems to have emerged as an immediate resistance, above which a bout of short-covering could assist the pair to aim towards reclaiming the 1.2900 round figure mark.
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