USD/CAD bounces off lows, bulls eyeing a breakthrough 50-DMA hurdle
| • A modest USD uptick helps recover early lost ground.
• Positive oil prices seemed capping additional gains.
The USD/CAD pair has managed to recover early lost ground and is now making a fresh attempt to move past 50-day SMA immediate hurdle.
A combination of factors, ranging from upbeat crude oil prices and a subdued USD price action, prompted some initial weakness during the Asian session on Monday. The pair dropped to an intraday low level of 1.2527 and eroded a part of Friday's strong up-move, led by upbeat US housing market data and dismal Canadian manufacturing sales.
As the European session got underway, the US Dollar began to attract some buyers and helped the pair to bounce off lows and move back above mid-1.2500s. Further gains, however, remained capped amid positive sentiment around oil markets, which was seen underpinning demand for the commodity-linked currency - Loonie.
It, however, remains to be seen if the pair is able to break through the 50-DMA barrier amid holiday-thinned liquidity conditions as the US markets will remain closed on the back of the Presidents' Day.
Technical levels to watch
A follow-through buying interest beyond 1.2565 level is likely to accelerate the up-move back towards reclaiming the 1.2600 handle en-route 100-day SMA barrier near the 1.2620 region.
On the flip side, the 1.2530-25 region might continue to lend immediate support and is followed by support near the key 1.2500 psychological mark, which if broken might turn the pair vulnerable to slide further in the near-term.
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