This week so far has been highly positive for Canadian Loonie in broad market as price action in USDCAD pair has managed to stay in Loonie’s favor so far. Loonie has received steady bullish influence in broad market over news related to NAFTA proceedings and spike in crude oil price on concerns over global supply disruption owing to US Sanctions on Iran. The USD/CAD pair traded with a mild positive bias through the early European session on Thursday and is currently placed at session tops, around the 1.2925-30 regions. The pair continues finding some buying interest near the 1.2900 handle and for now, seems to have snapped four consecutive days of losing streak. The recent US Dollar bearish pressure now seems to have eased, especially after an upward revision of the US GDP growth figures on Wednesday and was seen as one of the key factors lending some support.
NAFTA Talks Remain Main Focus While Investors Await Canadian GDP For Fresh Impetus Before Placing New Bets.
However the pair still remains trapped well inside weekly lows, the pair has managed to recover a major part of the overnight slide, albeit a combination of factors kept a lid on any strong up-move, at least for the time being. Optimism over the revision of the North American Free Trade Agreement (NAFTA), coupled with a strong bullish sentiment around crude oil prices underpinned the commodity-linked Loonie and might continue to cap any meaningful recovery attempt. With latest comments from Canadian Prime minister over concessions made to US and representatives from US mentioning possibility of coming to final agreement on NAFTA deal by Friday, NAFTA headlines has remained the main focus of investors across the week while providing strong positive influence to Canadian Loonie.
Moreover, traders might also refrain from placing any aggressive bets and prefer to wait on the sidelines ahead of today’s release of the monthly Canadian GDP growth figures. This coupled with the US economic releases – the core PCE price index, personal income/spending data and the usual initial jobless claims will now be looked upon for some fresh impetus later during the early North-American session. Immediate resistance is pegged near the 1.2960 area, above which the pair is likely to aim towards reclaiming the key 1.30 psychological mark. On the flip side, a sustained break below the 1.2900 handle now seems to pave the way for an extension of the pair’s near-term bearish trajectory towards testing the very important 200-day SMA support, currently near the 1.2855-50 region.
This article was originally posted on FX Empire
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