USD/CAD in search of a firm direction, stuck in a range below mid-1.2400s
| • Goodish USD rebound offset by bullish oil prices.
• Investors seemed to await Wednesday’s BOC decision.
The USD/CAD pair lacked any firm directional bias and was seen oscillating in a narrow trading range above the 1.2400 handle.
Last week, the pair stalled its modest recovery attempt near the 100-day SMA, support turned resistance and retreated back closer to over 3-month lows amid some intense US Dollar selling pressure, which continued exerting some downward pressure on Monday.
However, a combination of diverging factors, with a goodish pickup in the USD demand largely offset by the prevalent strong bullish sentiment around crude oil prices and has eventually failed to provide any fresh impetus to the major.
Moreover, investors also seemed reluctant to place any fresh aggressive bets ahead of Wednesday's BOC monetary policy decision and could be one of the factors leading to a subdued/range-bound price action on Tuesday.
Later during the early NA session, the release of Empire State Manufacturing Index would now be looked upon for some fresh short-term trading opportunities.
Technical levels to watch
Immediate support remains near the 1.2400 handle, below which the pair could head back towards 1.2355 level before eventually dropping to its next major support near the 1.2300-1.2295 region.
On the upside, momentum above mid-1.2400s could trigger a short-covering bounce towards the key 1.2500 psychological mark en-route 1.2550-55 supply zone and 100-day SMA barrier near the 1.2585-90 region.
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