USD/CAD slips in red but manages to defends 1.33 handle post data
The USD/CAD pair reversed early tepid recovery gains and refreshed session low near the 1.3300 handle following the US and Canadian economic data.
The pair ran through fresh offers and built on previous session's sharp reversal move from 1.3400 mark after Canadian Raw Materials Price Index (RMPI) increased by 1.2% in Feb., down from previous month's 1.7% but still higher-than consensus estimates. Meanwhile, Canadian industrial production recorded lower-than-expected growth of 0.1% in Feb. (vs. 0.3% expected) but the upward revision of previous months reading, now showing a growth of 0.6% as compared to 0.4% reported earlier, extended support to the Canadian Dollar.
Adding to this, positive trading sentiment surrounding oil markets, with WTI crude oil gains around 0.75% and inching closer to the $50.00 psychological mark, further boosted demand for the commodity-linked currency - Loonie, and collaborated to the offered tone surrounding the major.
Meanwhile, data released from the US showed, economy grew at an annualized pace of 2.1% during the fourth quarter of 2016. The GDP growth was better-than 2.0% growth expected, and 1.9% reported earlier, but seems to have been negated by disappointing initial jobless claims data from the US. Nevertheless, mixed US macro data did assist the key US Dollar Index to extend its recovery move further beyond the key 100.00 important hurdle and seems to help the major to hold its neck just above the 1.3300 handle.
Next in focus would be speeches from couple of FOMC members - Dallas Fed President Robert Kaplan and San Francisco Fed President John Williams, where comments on economy and monetary policy outlook might influence the greenback demand and provide fresh impetus during the NY trading session.
Technical levels to watch
On a sustained weakness below 1.3300-1.3295 region, also coinciding with 100-day SMA, is likely to accelerate the slide towards 1.3265 (March 21 low) ahead of 50-day SMA support near 1.3240-35 area. Meanwhile on the upside, recovery back above 1.3325-30 zone should lift the pair back towards mid-1.3300s before the pair eventually darts towards 1.3380 strong horizontal resistance.