USD/CAD confined in a near-term trading range around 100-DMA
The USD/CAD pair extended its near-term consolidative price action and remained below 100-day SMA region on Tuesday.
Currently trading around 1.3230 band, the pair once again ran through some offers near 100-day SMA and trimmed some of its early gains recorded in wake of resurgent US Dollar buying interest. The ongoing recovery mood around oil market, with WTI crude oil holding comfortably above $52.00/barrel mark, was seen lending support to the commodity-linked currency - Loonie, and collaborated to restricting the pair's up-move.
On economic data front, Canadian housing starts housing starts rose to 207K in December as against previous month's 187K (revised higher from 184K reported earlier), while building permits contracted by 0.1% in November, far less than -5.0 expected but was worse than prior 10.5% strong growth. Strong Canadian housing market data exerted some fresh selling pressure around the major.
Looking at the broader picture, the pair has failed to register any meaningful recovery, following a sharp slide of around 400-pips from the vicinity of 1.3600 handle. Moreover, the pair has been oscillating within 100-pips trading range, pointing to a brief pause before resuming its prior weakening trend. A convincing break below 1.3200 handle would reaffirm the assumption and turn the pair vulnerable to continue drifting lower in the near-term.
Next on tap would be JOLTs Job Openings data from the US ahead of the weekly API report on US domestic crude stockpiles, which would be looked upon for some fresh impetus during NY trading session.
Technical levels to watch
Immediate support is pegged near 1.3200 handle, which if broken decisively has the potential to drag the pair below 1.3175 support area (Jan. 6 low) towards its next support near 1.3130, en-route the very important 200-day SMA support near 1.3100-1.3090 region.
On the upside, momentum above 100-day SMA hurdle near 1.3255-60 region, leading to a subsequent strength above 1.3275-80 resistance (yesterday’s high), is likely to trigger a short-covering bounce beyond 1.3300 handle towards its next resistance near 1.3335-40 region.