Published: 2/19/2018 9:25:00 AM
• Goodish pickup in the USD demand helps build on Friday’s strong gains.
• Positive oil prices did little to support Loonie and stall the up-move.
• Move above 50-DMA seems to have triggered a short-covering move.
The USD/CAD pair caught some fresh bids near the 1.2525-30 region and broke through the 50-day SMA hurdle during the early NA session.
Currently trading around the 1.2585 region, testing session tops, a goodish pickup in the US Dollar buying interest was seen as one of the key factors that helped the pair to build on Friday's strong rebound from mid-1.2400s.
Moreover, possibilities of some short-term trading stops being triggered, on a decisive move beyond 1.2555-60 area, Asian session tops also seemed to have collaborated to the pair's sharp upsurge over the past hour or so.
Meanwhile, the prevalent positive trading sentiment around oil markets, with WTI crude oil holding with gains of around 1.0%, did little to underpin demand for the commodity-linked currency - Loonie, albeit might now contribute towards capping further gains.
Hence, it would prudent to wait for a follow-through buying interest, possibly beyond the 1.2600-1.2615 region (100-day SMA hurdle), before positioning for any further near-term appreciating move.
Technical levels to watch
A convincing breakthrough the mentioned barrier near the 1.2600-1.2615 zone is likely to accelerate the up-move towards mid-1.2600s en-route monthly highs resistance near the 1.2685-90 region.
On the flip side, 1.2555 area (50-DMA) now seems to protect the immediate downside, which if broken now seems to drag the pair back towards retesting the key 1.2500 psychological mark.
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