USD/CAD gives up majority of tepid recovery gains; 1.35 at risk?
|The USD/CAD pair managed to defend the key 1.35 psychological mark and staged a minor recovery from monthly lows. The early up-move, however, lacked momentum and the pair has now surrendered majority of its recovery gains, retreating over 25-pips pips from session tops to currently trade around 1.3520-15 band.
The pair's recovery move ran out of steam amid the ongoing bullish sentiment surrounding oil markets, with WTI crude oil hitting fresh 4-week tops beyond $51.00/barrel mark and lending support to the commodity-linked currency - Loonie. Growing expectations the OPEC members would agree to extend productions cuts when they meet later this week has been supportive of the recent oil rally and hence, would now be the next big fundamental catalyst determining the pair's near-term trajectory.
• WTI: A phase of upside consolidation around $ 51 mark
Meanwhile, investors this week will also confront the release of FOMC meeting minutes, due on Wednesday, and would be looked upon for clues over the central bank's near-term monetary policy outlook. Increasing odds for an eventual Fed rate-hike action in June has helped the pair to hold its neck above the 1.35 handle, at least for the time being.
With an empty US economic docket, today's focus would be on speeches by various Fed officials that would be looked upon for some trading impetus later during the day.
Technical levels to watch
Immediate support on the downside remains at the 1.35 handle, below which the pair is likely to extend the recent downward trajectory towards 1.3470 horizontal support en-route its next support near 1.3440-35 area.
Conversely, any recovery attempts beyond mid-1.3500s now seems to confront strong hurdle near 1.3575-80 region, which if conquered might trigger a short-covering rally beyond the 1.3600 handle towards testing an important hurdle near 1.3645-50 region.
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