USD/CAD struggles to build on overnight recovery, fails ahead of 1.22 handle

Haresh Menghani FXStreet

The USD/CAD pair traded with mild negative bias through Asian session on Wednesday and eroded part of previous session's recovery gains.

A mildly softer tone around the US Dollar, amid some renewed concerns over geopolitical tensions with N. Korea, has been one of the key factors failing to assist the pair to build on overnight recovery. The pair stalled its recovery move just ahead of the 1.2200 handle and has now retreated back to the 1.2170-65 region.

Meanwhile, a range bound action around crude oil prices did little to provide any fresh bullish impetus to the commodity-linked currency - Loonie and has helped limit further losses, at least for the time being.

Looking at the broader picture, the pair had a good tw0-way moves over the past three trading session and has held within striking distance of near 29-month lows touched last Friday as traders seemed to await for a fresh catalyst before positioning for the next leg of directional move.

Today's release US PPI print would be now be looked upon for some fresh trading impetus ahead of EIA's weekly crude oil inventories data.

Technical levels to watch

A follow through retracement below mid-1.2100 could drag the pair back towards the 1.2100 handle, which if broken could extend the slide back towards multi-month lows support near 1.2060 level.

On the upside, the 1.2200 handle remains immediate hurdle, above which the pair is likely to accelerate the recovery move towards 1.2230-40 intermediate resistance before eventually darting towards the 1.2300 round figure mark.

Author

Haresh Menghani

FXStreet

Haresh Menghani is a detail-oriented professional with 10+ years of extensive experience in analysing the global financial markets.

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