USD/CAD finds decent support near 1.2400 handle, CAD data awaited

Haresh Menghani FXStreet

• Reviving USD demand helps rebound from 1.2400 mark.
• Weaker oil prices further weigh on commodity-linked Loonie.
• Second-tier economic data eyed for fresh trading impetus.

The USD/CAD pair quickly reversed an early European session dip to the 1.2400 handle and is now headed towards the top end of its daily trading range.

Reviving US Dollar demand, backed by a strong follow-through upsurge in the US Treasury bond yield and despite looming fears of a possible US government shutdown, has been one of the key factors behind the pair's rebound from lows.

Adding to this, a weaker tone around oil markets, with WTI crude oil trading with losses of nearly 1%, further dented demand for the commodity-linked Loonie and collaborated to the pair's steady uptick over the past few hours.

The pair, however, lacked any firm directional bias and has held within the post-BOC familiar trading range, just above the 1.2400 handle. Hence, traders are likely to wait for a break-out in either direction before initiating any fresh positional trades.

On the economic data front, Canada reports manufacturing sales, and international security transactions, while from the US the Prelim UoM Consumer Sentiment would now be looked upon for some short-term trading opportunities.

Technical levels to watch

Bulls would be eyeing for a clear breakthrough mid-1.2400s, above which the pair could be headed back towards reclaiming the key 1.25 psychological mark before eventually darting towards the 1.2445-50 heavy supply zone.

On the flip side, the 1.2400 handle might continue to protect the immediate downside, which if broken might accelerate the slide back towards the 1.2360-55 support area en-route the 1.2320-10 region.

Author

Haresh Menghani

FXStreet

Haresh Menghani is a detail-oriented professional with 10+ years of extensive experience in analysing the global financial markets.

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