USD/CAD strengthens further beyond mid-1.3200s ahead of data
| • The USD regains positive traction and helped provide a goodish lift.
• Rallying oil prices underpinned Loonie and seemed to cap strong gains.
• Traders now eye US/Canadian economic data for some fresh impetus.
The USD/CAD pair reversed an early dip to 100-day SMA support and jumped to two-day tops, around the 1.3270-75 region in the last hour, albeit lacked any strong follow-through.
The US Dollar regained some positive traction since the early European trading session and added to the overnight US CPI-led gains, which turned out to be one of the key factors behind the pair's intraday up-move of over 40-pips.
The pair built on the previous session's goodish bounce from one-week lows and was now seen trading with a mild positive bias for the second straight session, albeit lacked bullish conviction amid a strong follow-through rally in crude oil prices.
Oil prices rose by around 1% on the back of US-China trade optimism and China's crude imports figures, which continued underpinning the commodity-linked currency - Loonie and might keep a lid on any runaway rally, at least for the time being.
Market participants now look forward to the economic docket, highlighting the delayed release of December US monthly retail sales data, which coupled with the latest US PPI print and Canadian manufacturing sales data should produce some meaningful trading opportunities.
Technical levels to watch
Any subsequent up-move might continue to confront stiff resistance near the 1.3300-1.3310 region, above which the pair is likely to head towards testing the 1.3355-60 supply zone before eventually aiming to reclaim the 1.3400 handle.
On the flip side, the 1.3230-25 region (100-DMA) now seems to protect the downside, which if broken might turn the pair vulnerable to break below the 1.3200 handle and slide further towards challenging the very important 200-day SMA support.
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