USD/CAD halts reversal from weekly high after US weekly jobless claims

Extending its reversal from weekly high level, the USD/CAD pair dropped further below 1.3300 handle but found some fresh buying interest following the release of US weekly jobless claims data.

Currently trading around 1.3250-55 region, the pair managed to bounce off session low level of 1.3238 after US weekly jobless claims for the week ended October 7 dropped to a 43-year low and came-in at 246K, lower than 254K expected. Previous week's reading was also revised lower to 246K from 249K reported initially. 

The data pointed to the underlying strength in the US labor market and might reinforce market expectations that the Fed would eventually move towards raising interest rates by the end of this year. Hence, any further slide might now be limited as markets participants now look forward to Friday's release of monthly retail sales data.

Meanwhile, a tepid recovery in crude oil prices (now moving back above $50.00/barrel mark) provided an additional reason for traders to lighten their bullish positions. Later during NY trading session, the official EIA report on weekly US crude oil inventories would provide fresh impetus in oil markets and eventually trigger the next leg of move in the USD/CAD major. 

Technical levels to watch

A follow through selling pressure below 1.3240 seems to drag the pair back towards the very important 200-day SMA support near 1.3200 handle below which the pair is likely to head back towards testing 1.3260 horizontal support. 

Meanwhile on the upside, bullish momentum back above 1.3275 level should boost the pair back above 1.3300 handle and a follow through buying interest above 1.3300 handle now seems to lift the pair immediately towards 1.3320 resistance.