USDCAD Remains under selling pressure on Tuesday following a modest USD retracement. Should traders expect further weakness? What does today’s analysis reveal?
11 September, OctaFX – The USDCAD pair remained under some selling pressure on Tuesday and dropped to an intraday low level of 1.3131 in the last hour, albeit recovered few pips thereafter.
USDCAD Remains Under Selling Pressure
The pair extended overnight retracement slide from the 1.3200 neighborhood and was further weighed down by the prevalent US Dollar selling bias. This coupled with a modest uptick in crude oil prices underpinned the commodity-linked currency – Loonie and further collaborated to the pair’s offered tone.
Further downside, however, remained limited as investors seemed to refrain from placing any aggressive bearish bets and await fresh developments in international trade disputes. Canada and the US will restart high-level talks on Tuesday and try to resolve stubborn differences over the North American Free Trade Agreement (NAFTA).
Meanwhile, a general risk-off mood across European equity markets was seen lending some support to the greenback’s safe-haven status and further collaborated towards limiting any meaningful downfall. The pair has managed to rebound around 30-pips and is currently hovering around mid-1.3100s, within Friday’s broader trading range.
Technical levels to watch
A follow-through weakness could get extended towards 50-day SMA, near the 1.3090 area, before the pair eventually drops to 100-day SMA support near the 1.3040 region. On the upside, any meaningful up-move might continue to confront some fresh supply near the 1.3200-1.3210 region, which if cleared now seems to lift the pair towards 1.3270-75 intermediate resistance en-route the 1.3300 handle.
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