The USD/CAD pair gained some fresh traction for the second consecutive day on Monday but still remains confined within 6-day old broader trading range below the very important 200-day SMA.
On Friday, the pair did attempt a break through the recent trading range but failed to sustain its move above 1.3100 handle. On Monday the pair was seen reattempting to build on to its move back above 1.3100 handle despite of a positive trading sentiment surrounding oil markets, which tends to benefit the commodity-linked currency - Loonie. In fact, WTI crude oil has now moved back above $54.00/barrel mark, with a gain of over 0.50%, and might contribute towards restricting any immediate sharp upside for the major.
Meanwhile, a subdued greenback price-action, with the key US Dollar Indexstuck in a narrow band near 100.85 region, has not be supportive of the pair's up-move on Monday.
With the US markets closed on Monday, traders would take cues from the release of monthly Canadian Wholesale Sales data in order to grab some short-term trading opportunities. Moreover, market sentiment surrounding the greenback and oil market would also collaborate towards determining the pair's movement, if any, on Monday.
Technical levels to watch
Currently trading around 1.3110-15 region, any subsequent move above 1.3125 region (Friday’s high) might confront resistance at 200-day SMA near 1.3140 region above which a fresh bout of short-covering has the potential to lift the pair beyond 1.3200 handle towards 50-day SMA resistance near 1.3220 region.
On the flip side, sustained weakness below 1.3080, leading to a subsequent break below 1.3055-50 region, might continue to find support near 1.3020-10 region. A convincing break below 1.3020-10 support would turn the pair vulnerable to continue drifting lower in the near-term.