USD/CAD trying to build on momentum beyond mid-1.3200s
| • A modest USD uptick, though unconvincing, helps find some support.
• Bullish oil prices underpin Loonie and seemed to cap any further up-move.
• Traders also seemed reluctant ahead of the next round of US-China trade talks.
The USD/CAD pair held on to its mildly positive tone through the early European trading session, albeit struggled to attract any strong follow-through buying.
The pair stalled its corrective slide from near three-week tops set last week and showed some resilience below 100-day SMA to snap two consecutive days of losing streak amid a modest US Dollar uptick.
After ending nearly unchanged on the back of the Presidents' Day holiday on Monday, the greenback gained some positive traction and was seen as one of the key factors lending some support to the major.
Bulls, however, seemed lacking strong conviction and the up-move remained capped amid the prevalent positive tone around crude oil prices, which tend to underpin demand for the commodity-linked currency - Loonie.
This coupled with anxiety ahead of the next round of US-China negotiations in Washington this week further seemed to hold investors from placing any aggressive bets and might keep a lid on any subsequent up-move.
The higher-level talks will start on Thursday, wherein Chinese Vice-Premier Liu He is set to meet US Treasury Secretary Steven Mnuchin and Trade Representative Robert Lighthizer, and look to resolve trade conflicts.
Today's economic docket lacks any major market-moving economic releases, either from the US or Canada, and hence, the USD/oil price dynamics might act as key determinants of the pair's momentum on Tuesday.
Technical levels to watch
Any follow-through up-move is likely to confront some fresh supply near the 1.3290-1.3300 region, above which the pair is likely to make a fresh attempt towards clearing the 1.3330 supply zone and test 1.3370-75 resistance. On the flip side, the 1.3235-25 region might continue to protect the immediate downside, which if broken might turn the pair vulnerable to break below the 1.3200 handle and accelerate the fall further towards the very important 200-day SMA support near the 1.3145-40 region.
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