12 October, OctaFX – The USDCAD pair held on to its weaker tone through the mid-European session and is currently placed at the lower end of its daily trading range, just above 1.30 handle.
Loonie Under Selling Pressure
The pair extended previous session’s retracement slide from two-week tops and remained under some selling pressure for the second consecutive session on Friday. The corrective slide seemed rather unaffected by a modest US Dollar rebound, supported by a fresh leg of an upsurge in the US Treasury bond yields.
Bearish traders seemed to track a goodish pickup in crude oil prices, which underpinned the commodity-linked currency Loonie and turned out to be one of the key factors exerting some downward pressure. Today’s downfall could further be attributed to some technical selling/long-unwinding, especially after yesterday’s rejection from an important 100-day SMA hurdle.
Despite a combination of negative forces, the pair has managed to defend the key 1.30 psychological mark and now seems to have found some additional support from a larger than expected rise in the US import price index, coming in at 0.5% m/m as against a contraction of 0.4% recorded in the previous month.
Today’s US economic docket also features the release of Prelim UoM Consumer Sentiment, which along with a scheduled speech by Atlanta Fed President Raphael Bostic will be looked upon for some meaningful trading opportunities on the last trading day of the week.
Technical Levels to Watch
A convincing break below the 1.30 mark is likely to accelerate the fall towards 1.2955-50 support area en-route 1.2925-20 support area and the 1.2900 handle.
On the upside, the 1.3035-40 area seems to act as an immediate resistance and is closely followed by the 1.3070 region (100-DMA), above which the pair seems all set to surpass the 1.3100 handle and test 1.3135-40 supply zone.
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