USD/CAD makes a fresh attempt to build on momentum beyond 1.3100 handle
| • Sharp fall in oil prices undermined Loonie and helped reverse an early dip.
• Further gains seemed limited ahead of Wednesday’s BoC policy update.
The USD/CAD pair extended its consolidative price action on Tuesday and is currently placed at the top end of the 48-hours-old trading range, just above the 1.3100 handle.
Despite retracing US Treasury bond yields, primarily led by a fresh wave of global risk-aversion trade, the US Dollar managed to hold its ground and helped limit the early downtick.
This coupled with a sharp fall in crude oil prices undermined demand for the commodity-linked Loonie and helped the pair to regain positive traction from an intraday low level of 1.3083.
It, however, remains to be seen if the pair is able to sustain/build on the positive momentum or continues facing some fresh supply at higher levels as investors start repositioning for this week's key event risk - the latest BoC monetary policy update on Wednesday.
This coupled with a duo of important US macroeconomic releases - durable goods orders and advance Q3 GDP growth figures will now play an important role in determining the pair's next leg of directional move.
Technical levels to watch
Immediate resistance is pegged near the 1.3135-40 region, above which the pair seems all set to aim towards reclaiming the 1.3200 handle with some intermediate resistance near the 1.3175-80 zone.
On the flip side, any meaningful retracement is likely to find strong support near 100-day SMA, currently near the 1.3070 region, which if broken might accelerate the slide further towards the key 1.30 psychological mark.
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