USD/CAD struggling to extend momentum further beyond 1.34 handle

Haresh Menghani FXStreet

The USD/CAD pair struggled to build on early bullish spike and retreated few pips from nearly two-week tops but continued holding in positive territory through early European session

A mild greenback recovery, with the key US Dollar Index extending overnight tepid recovery move from over four-month lows, helped the pair to break through the 1.3400 handle. However, modest recovery in WTI crude oil prices extended some support to the commodity-linked currency - Loonie, and collaborated towards capping further up-move for the major.

• WTI extends the rebound above $ 48, API report eyed

Also on Monday, the pair caught fresh bids near 1.3320-15 horizontal support and reversed weekly bearish gap led by the Trump administration’s inability to push through a key healthcare bill to repeal Obamacare, albeit failed to extend the recovery move further beyond the 1.3400 handle.

On the economic data front, the release of goods trade balance and CB Consumer Confidence index from the US might provide some trading impetus during early NA session. Market focus, however, would remain on key speeches from BOC Governor Stephen Poloz and Dallas Fed President Robert Kaplan, due later during the day.

Technical levels to watch

On a sustained move above 1.3415 level (session peak), the pair is likely to aim towards 1.3445-50 intermediate resistance ahead of 1.3480 resistance and the key 1.35 psychological mark.

On the flip side, 1.3375 level now becomes immediate support to defend, which if broken could accelerate the retracement to mid-1.3300s before the pair eventually drops to retest 1.3320-15 strong support.

1 Week
1 Month
1 Quarter

1 Week

Avg Forecast 1.3373

34% Bullish
33% Bearish
33% Sideways

Bias Bullish

1 Month

Avg Forecast 1.3407

53% Bullish
40% Bearish
7% Sideways

Bias Bullish

1 Quarter

Avg Forecast 1.3532

60% Bullish
20% Bearish
20% Sideways

Bias Bullish

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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