• Upbeat Canadian GDP growth figures prompt some aggressive selling.
• Stronger ADP report/retracing oil prices helped limit deeper losses.
The USD/CAD pair quickly reversed Canadian GDP-led dip to the 1.3100 neighborhood and might now be headed back towards the top end of its daily trading range.
The pair met with some aggressive supply and fell around 30-35 pips from an intraday high level of 1.3140 in a knee-jerk reaction to slightly better-than-expected Canadian monthly GDP print, coming in to show m/m growth of 0.1% in August as against a flat reading anticipated.
The downfall, however, was cushioned amid a modest US Dollar rebound, supported by stronger than expected ADP report. The latest US employment report showed that private sector employers added 227K new jobs in October as compared to consensus estimates pointing to a reading of 189K, down from 230K previous.
This coupled with an intraday retracement in crude oil prices further undermined demand for the commodity-linked currency - Loonie and further collaborated towards limiting any deeper slide. The pair once again found some support near the 1.3100 handle and is now trading back with a positive bias, around the 1.3125-30 region.
With today's US/Canadian macro data out of the way, the USD/oil price dynamics might continue to act as key determinants of the pair's momentum through the US trading session.
Technical levels to watch
The 1.3145-50 region might continue to act as an immediate resistance, above which the pair is likely to accelerate the up-move further towards reclaiming the 1.3200 handle. On the flip side, the 1.3100 handle now seems to have emerged as an immediate strong support, which if broken might prompt some aggressive selling and drag the pair towards mid-1.3000s en-route the key 1.30 psychological mark.
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