USD/CAD keeps the red but continues to find support near 1.30 handle

Haresh Menghani FXStreet

• Bullish oil prices underpin Loonie and exert some pressure for the second straight session.
• The downtick seemed unaffected by a goodish USD rebound and resurgent US bond yields.

The USD/CAD pair held on to its weaker tone through the mid-European session and is currently placed at the lower end of its daily trading range, just above 1.30 handle.

The pair extended previous session's retracement slide from two-week tops and remained under some selling pressure for the second consecutive session on Friday. The corrective slide seemed rather unaffected by a modest US Dollar rebound, supported by a fresh leg of an upsurge in the US Treasury bond yields.

Bearish traders seemed to track a goodish pickup in crude oil prices, which underpinned the commodity-linked currency Loonie and turned out to be one of the key factors exerting some downward pressure. Today's downfall could further be attributed to some technical selling/long-unwinding, especially after yesterday's rejection from an important 100-day SMA hurdle.

Despite a combination of negative forces, the pair has managed to defend the key 1.30 psychological mark and now seems to have found some additional support from a larger than expected rise in the US import price index, coming in at 0.5% m/m as against a contraction of 0.4% recorded in the previous month.

Today's US economic docket also features the release of Prelim UoM Consumer Sentiment, which along with a scheduled speech by Atlanta Fed President Raphael Bostic will be looked upon for some meaningful trading opportunities on the last trading day of the week.

Technical levels to watch

A convincing break below the 1.30 mark is likely to accelerate the fall towards 1.2955-50 support area en-route 1.2925-20 support area and the 1.2900 handle. On the upside, the 1.3035-40 area seems to act as an immediate resistance and is closely followed by the 1.3070 region (100-DMA), above which the pair seems all set to surpass the 1.3100 handle and test 1.3135-40 supply zone.

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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