Bulls Seems to Regain Control Over USD/CAD
The USD/CAD pair extended its recovery from yesterday's low and is now trading comfortably above the mid-point of 1.2800-1.2900 handle.
The pair's weakness on Thursday to 1.2770 level was on the back of higher-than-expected US weekly jobless claims data and a sharp rise in crude oil prices. The drop, however, was quickly bought into after some hawkish comments from three voting members of the Fed’s interest-rate setting committee, clearly indicating that two interest-rate hikes were still on the table for 2016 provided US economic data remains robust.
The pair's further recovery, however, remained capped on buoyant crude oil prices. Any signs of profit taking in crude should assist the pair to further extend its recovery.
Technical levels to watch
On the upside, traders would be immediately eyeing for a sustained move above 1.2900 round figure mark ahead of the recent closing highs resistance near 1.2950-60 region. A follow through buying interest above 1.2950-60 resistance now seems to provide the required momentum to lift the pair beyond 1.3000 psychological mark, initially towards 1.3075-80 intermediate resistance and eventually towards April month daily closing highs resistance near 1.3145-50 zone.
On the downside, 1.2840 horizontal area seems to protect immediate downside, which if broken might negate the bullish outlook and could drag the pair back below 1.2800 handle towards its next major support near 1.2720-15 area.