USD/CAD struggles to gain traction despite supportive data
| • US monthly retail sales jump 0.8% m-o-m in Nov.
• Surging US bond yield lending some additional support.
• Canadian NHPI misses estimates, weaker oil prices also weighing on Loonie.
The USD/CAD pair trimmed a major part of its daily gains and retreated around 30-pips from session tops, despite stronger-than-expected US economic data.
The pair continued with its struggle to gain strong follow-through traction beyond mid-1.2800s and was being further capped by a subdued US Dollar price action. With investors still digesting overnight downbeat inflation outlook by the Fed, a strong uptick in the US Treasury bond yields did little to revive the US Dollar demand.
Meanwhile, a sharp retracement in crude oil prices, which tends to weigh on the commodity-linked currency – Loonie, helped the pair to hold in positive territory.
On the economic data front, the US monthly retail sales registered a stronger-than-expected m-o-m growth of 0.8% during November and initially weekly jobless claims unexpectedly dropped to 225K during the week ended December 8.
Separately, the Canadian New Housing Price Index (NHPI) missed consensus estimates and provided a minor boost to the pair during early NA session, albeit has failed to attract any strong buying interest.
Technical levels to watch
Bulls would continue to try and defend the 1.2800-1.2790 support area, below which the pair might turn vulnerable to head back towards the 1.2700 handle with some intermediate support near the 1.2760 region.
On the flip side, the 1.2865-70 region remains an immediate strong hurdle, which if conquered might now assist the pair to move past the 1.2900 handle and test 1.2915-20 supply zone.
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