USD/CAD moves back to 1.2300 handle, NFP holds the key

Haresh Menghani FXStreet

• A modest USD rebound helps gain some positive traction.
• Bullish oil prices might cap any additional strength.
• Market focus remains on the key US monthly jobs report.

The USD/CAD pair gained some positive traction on Friday and recovered a part of previous session's slump back closer to over 4-month lows.

A modest US Dollar rebound, backed by the ongoing upsurge in the US Treasury bond yields on firming expectations at least 3 Fed rate hike moves in 2018, was seen lending some support to the major.

The up-move, however, seemed lacking conviction and remained capped below the 1.2300 handle amid positive crude oil prices, which underpinned demand for the commodity-linked currency - Loonie.

Meanwhile, the recent price action, wherein every attempted recovery move has been sold into, clearly seems to suggest that the near-term bearish pressure might still be far from over. Hence, it would be prudent to wait for a strong follow-through buying interest before confirming that the pair might have bottomed out in the near-term.

Traders on Friday would now take cues from the keenly watched US monthly jobs report, popularly known as NFP, which might provide some immediate respite for the USD bulls.

Technical levels to watch

Immediate support is pegged near 1.2255-50 zone, below which the pair is likely to fall towards the 1.2200 handle en-route 1.2180-75 support area. Momentum beyond the 1.2300 handle is likely to confront immediate resistance near the 1.2335 region, above which the pair is likely to head towards 1.2370-75 supply zone en-route the 1.2400 handle.

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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