• Consolidative USD price action does little to provide any fresh bullish impetus.
• A goodish rebound in oil prices underpin Loonie and exert some pressure.
• Traders now eye today’s economic docket for some meaningful opportunities.
After an initial uptick to 1.3220 area, the USD/CAD pair turned lower and eroded a part of overnight post-BoC strong up-move.
On Wednesday, the pair initially tumbled to near four-week lows in reaction to the Bank of Canada’s (BoC) decision to raise benchmark interest rate by 25 bps to 1.50%.
The bearish pressure quickly faded and the pair once again managed to find decent support near the 1.3065 region, rallying around 150-pips from intraday lows during the post-meeting press conference.
The BoC Governor Stephen Poloz warned that the economy might slow down in wake of growing trade tensions, which was perceived as dovish signal and prompted some aggressive selling around the Canadian Dollar.
This coupled with, a combination of supporting factors, ranging from resurgent US Dollar demand and a sharp decline in oil prices, provided an additional boost and further collaborated to the pair’s strong upsurge back above the 1.3200 handle.
With the USD consolidating overnight gains, a goodish recovery in crude oil prices underpinned the commodity-linked currency – Loonie and exerted some downward pressure on Thursday.
Moving ahead, today economic docket, featuring the release of US consumer inflation figures and Canadian New Housing Price Index (NHPI), will now be looked upon for some fresh impetus later during the early North-American session.
Technical levels to watch
The 1.3180 level now seems to protect the immediate downside, which if broken could accelerate the fall back towards 1.3140-35 horizontal support before the pair eventually drops back to the 1.3100 handle.
On the upside, a sustained move beyond the 1.3210 level now seems to pave the way for an extension of the bullish trajectory towards 1.3265 intermediate supply zone en-route the 1.3300 round figure mark.
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