• Retreating oil prices help gain some positive traction.
• Persistent USD weakness limits any further up-move.
The USD/CAD pair built on its steady recovery move from near two-week lows and gained some positive traction further beyond the key 1.2500 psychological mark.
The latest leg of upsurge during the early NA session could be solely attributed to a sharp retracement in crude oil prices, which was seen weighing heavily on the commodity-linked currency – Loonie and driving the pair higher.
The up-move, however, lacked any strong follow-through momentum and was being capped by the prevailing bearish sentiment surrounding the US Dollar, which failed to gain any respite from the incoming stronger US economic data.
It would now be interesting to see if bulls are able to maintain their dominant position or the rebound is once again utilized as an opportunity to initiate fresh short positions, especially after yesterday's rejection slide from an important hurdle marked by 100-day SMA.
• USD/CAD points to further weakness near term – Scotiabank
Technical levels to watch
Any subsequent up-move is likely to confront fresh supply near the 1.2545-50 region, above which a fresh bout of short-covering could lift the pair back towards reclaiming the 1.2600 handle. On the flip side, weakness below 1.2470-65 area now seems to accelerate the fall towards 1.2435 horizontal support en-route the 1.2400 handle.
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