USD/CAD stages a goodish bounce from monthly lows, back near mid-1.3200s
- USD/CAD showed some resilience below 200-DMA and gained some traction.
- The ongoing USD bullish run turned out to be a key factor lending support.
- The uptick seemed rather unaffected by a positive tone around oil prices.
The USD/CAD pair built on the steady intraday recovery from three-week lows and is currently placed at the top end of its daily trading range, just below mid-1.3200s.
The pair showed some resilience below the very important 200-day SMA and attracted some buying interest ahead of the 1.3200 round-figure mark amid the prevailing strong bullish sentiment surrounding the US dollar.
Bulls take cues from strong USD
In fact, the key USD Index climbed to near three-year tops on Thursday and turned out to be one of the key factors that helped the pair to gain some traction and stall its recent corrective slide from four-month tops.
The greenback remained well supported by Wednesday's stronger-than-expected US economic data and the latest FOMC meeting minutes, which indicated that interest rates will likely be on hold for some time.
The pair has now recovered a major part of the overnight slide and the uptick seemed rather unaffected by positive oil prices, which tend to underpin demand for the commodity-linked currency – the loonie.
Oil prices gained on Thursday amid concerns about a supply squeeze in Libya and US sanctions on a unit of Russian energy firm Rosneft, offsetting the API report that showed a larger build in crude inventories.
It, however, remains to be seen if bulls can capitalize on the move or the pair runs out of the steam at higher levels, confirming that a near-term top is already in placing and setting the stage for further slide.
Moving ahead, market participants now look forward to Thursday's economic docket, featuring some second-tier data from Canada and Philly Fed Manufacturing Index from the US, for some meaningful impetus.
Technical levels to watch