USD/CAD recovers overnight losses, jumps back to 1.3200 mark

Haresh Menghani FXStreet

• USD catches fresh bids on Thursday and helps regain positive traction.
• Weaker oil prices weigh on Loonie and provide an additional boost.

The USD/CAD pair caught some fresh bids on Thursday, with bulls now eyeing a move back above the 1.3200 handle.

A combination of supporting factors helped the pair to stall overnight sharp retracment slide from 2-1/2 week tops and find decent buying interest near the 1.3160 region.

The US Dollar remained supported by upbeat economy outlooks from the Fed Chair Jerome Powell and the central bank’s Beige Book report, which reinforced gradual Fed rate hike prospects.

This coupled with a negative trading sentiment around crude oil prices weighed on the commodity-linked currency - Loonie and provided an additional boost.

The pair has now recovered all of its previous session's losses and a follow-through up-move, led by some fresh buying/short-covering, now looks a distinct possibility.

Today's economic docket, featuring the release of Canadian ADP National Employment Report, along with Philly Fed Manufacturing Index and the usual initial weekly jobless claims data from the US, will now be looked upon for some fresh impetus.

Technical levels to watch

Immediate resistance is pegged near the 1.3215 level, above which the pair is likely to head back towards retesting overnight swing high level of 1.3260 before eventually darting to reclaim the 1.3300 mark.

On the flip side, the 1.3165-60 area now seems to have emerged as an immediate support, which if broken might turn the pair vulnerable to slide back towards 1.3130 support en-route the 1.3100 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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