USD/CAD unable to extend momentum beyond 1.2950

A slight better-than-expected CPI data and an extended slide in oil prices boosted the USD/CAD pair back above 1.2950 level before giving-up few pips to currently trade near 1.2939.

The pair gathered steam after US headline inflation, as measured by CPI, printed higher-than-expected reading of 0.4% during the month of April. Over the last twelve month, headline CPI has gained 1.1%, up from March’s 0.9%.

From Canada, contraction of 0.9% in Manufacturing Sales during March was more-than-expected but was still better than sharp contraction of 3.3% recorded in February.

At the time of writing the pair is hovering around 50-day SMA region and a follow through momentum is required to assist the pair move beyond the very important 1.3000 psychological mark.

Technical levels to watch

Strength above 1.2955-63 is likely to aim for May 9 high level of 1.3015 and the momentum could further get extended towards April daily closing highs resistance near 1.3140-45 area.

On the flip side, immediate support is pegged just below 1.2900 handle (1.2890), followed by support near 1.2840 horizontal zone. A follow through weakness should drag the pair to test lower levels, initially 1.2765 and eventfully 1.2735 support region.