USD/CAD finds decent support at 1.36 handle, recovers around 50-pips from lows
The USD/CAD pair staged a goodish recovery from the 1.3600 neighborhood and eroded part of yesterday's sharp slide to near 3-week lows.
Currently trading around mid-1.3600s, just a few pips away from session tops touched in the past hour, the pair's recovery move since early European session could be attributed to some short-covering after bulls, for the second consecutive session, managed to defend the 1.3600 handle.
Meanwhile, a modest recovery in the US treasury bond yields further prompted traders to lighten their bearish bets amid lack of follow through traction in oil markets. In fact, WTI crude oil was seen consolidating overnight strong gains, led by Saudi Arabia and Russia's agreement on an extension of OPEC-led production-cut deal, to $49.00/barrel mark and failed to provide any additional boost to the commodity-linked currency - Loonie.
• Kuwait joins Saudis, Russia to seek oil cuts extension until March 2018 - BBG
However, given the prevalent bearish sentiment surrounding the US Dollar, against the backdrop of recent slew of weaker US macro data that seems to have dampened expectations of a faster Fed rate-tightening cycle, it would be interesting to see if the pair is able to build on to the recovery move or the bounce back is being utilized to initiate some fresh bearish bets.
Next on tap would be the US economic docket, featuring the release of housing market and industrial production data, which if adds to the recent disappointment could pave way for continuation of the pair's near-term corrective slide.
Technical levels to watch
A follow through buying interest beyond 1.3665-70 region could extend the up-move back towards the 1.3700 handle, above which a fresh bout of short-covering could lift the pair back towards yearly highs resistance near mid-1.3700s.
On the flip side, the 1.3600 handle remains immediate strong support to defend, which if broken would turn the pair vulnerable to accelerate the slide towards 1.3565-60 intermediate support en-route the key 1.3500 psychological mark.