USD/CAD bounces off 50-DMA support, Canadian GDP/US ISM in focus
• Remains confined within a broader trading range.
• Bullish oil prices help offset resurgent USD demand.
• Today’s economic data eyed for some fresh impetus.
The USD/CAD pair quickly reversed an early dip to 50-day SMA support, near the 1.2820 region, and rebounded around 25-pips from session lows.
Having fallen to one week low, around the 1.2800 handle on Monday, the pair recovered few pips and moved back to its recent trading range held over the past six trading sessions. A combination of diverging forces failed to provide any meaningful impetus and assist the pair to break through its recent trading range.
A strong US Dollar bid tone did not have much of an impact as the same seems to have been offset by prevalent bullish sentiment around crude oil prices, which remains buoyed by Iran sanction worries and underpinned demand for the commodity-linked currency - Loonie.
Moving ahead, today's economic data - monthly Canadian GDP growth figures and the US ISM manufacturing PMI, would be looked upon for some short-term momentum play ahead of a scheduled speech by the BOC Governor Stephen Poloz, later during the NY trading session.
Technical levels to watch
Any subsequent up-move beyond 1.2870 immediate resistance is likely to confront strong hurdle near the 1.2900 handle, above which the pair seems all set to aim towards challenging the 1.2935-40 supply zone.
On the flip side, the 1.2820-1.2800 region (50-day SMA) might continue to protect the immediate downside, which if broken is likely to accelerate the slide towards 1.2745 intermediate support en-route the 1.2700 handle.
Author
Haresh Menghani
FXStreet
Haresh Menghani is a detail-oriented professional with 10+ years of extensive experience in analysing the global financial markets.
