USD/CAD bounces off lows, finds some support near 1.3300 handle

The USD regained some positive traction in the last hour, helping the USD/CAD pair to quickly recovery around 20-pips from daily lows.

Having failed to capitalize on this week's goodish rebound from multi-month lows, the pair started retreating from 100-day SMA barrier and snapped three consecutive days of winning streak on Thursday.

A solid rebound in Crude Oil prices, surging over 4.0% intraday, provided a strong boost to the commodity-linked currency - Loonie and turned out to be one of the key factors weighing heavily on the major.

Oil prices rallied hard on Thursday in reaction to suspected attacks on two tankers in the Gulf of Oman, which raised concerns over potential disruptions to Oil flows and largely offset increasing US inventories.

Oil prices trimmed a part of the early strong gains, which coupled with a pickup in the US Dollar demand during the early North-American session helped the pair to find decent support near the 1.3300 handle.

The incoming softer US macro data - Wednesday's US consumer inflation being the latest, continued reinforcing market expectations that the Fed will be forced to cut interest rates by the end of this year. 

However, the fact that such a move is already priced in, market participants seemed reluctant to place any aggressive USD bearish bets, rather preferred to cover their short positions heading into next week's FOMC meeting.

It would now be interesting to see if the pair is able to build on the intraday rebound or continues with its struggle to make it back above 100-DMA hurdle as the focus now shifts to Friday's US monthly retail sales data.

Technical levels to watch