The USDCAD pair regained positive traction on Friday and has now climbed back closer to the overnight swing high, around the 1.3150-60 region.
February 1, GKFX – The pair once again managed to find decent support near the very important 200-day SMA and for now, seems to have snapped two consecutive days of losing streak amid a follow-through US Dollar uptick.
With investors looking past dovish Fed signals, the greenback built on the overnight goodish bounce from multi-week tops and was seen as one of the key factors prompting some short-covering move.
Weaker oil prices undermine Loonie
This coupled with a modest retracement in crude oil prices, amid fears of a deeper slowdown in China, further dampened demand for the commodity-linked currency – Loonie and remained supportive of the uptick.
It, however, remains to be seen if the pair is able to build on the attempted recovery or continues facing fresh supply at higher levels as focus shifts to the release of the keenly watched US monthly jobs report (NFP).
Today’s US economic docket also features the release of ISM manufacturing PMI, which might further collaborate towards producing some meaningful trading opportunities on the last trading day of the week.
USDCAD technical analysis
A follow-through buying might assist the pair to dart towards reclaiming the 1.3200 handle, above which a fresh short-covering could further extend the recovery move towards the 1.3265-70 supply zone.
On the flip side, the 1.3120 region (200-DMA) might continue to protect the immediate downside, which if broken might turn the pair vulnerable to break through the 1.3100 handle and head towards testing its next support near the 1.3060-55 region.
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