USD/CAD recovers to move back above 1.3000 handle

The USD/CAD pair has trimmed its early losses to 1.2966 and has now moved back above 1.3000 handle to currently trade around 1.3020/30 band ahead of US final GDP and Consumer Confidence.

Earlier during the day, the pair extended its reversal from 100-day SMA resistance and dropped below 1.3000 psychological mark as global risk-on sentiment is seen damaging the safe-haven appeal for the US Dollar. Adding to it, sharp recovery in crude oil prices was also extending support to the Canadian Dollar. 

Friday's strong up-surge assisted the pair to decisively move back above 50-day SMA. The pair failed to extend the momentum and on Monday and once again failed to conquer 100-day SMA resistance around 1.3100 handle. However, the pair now seems to hold 50-day SMA support, suggesting extension of the near-term bullish momentum once the pair decisively breaks through 1.3100 strong resistance.

Going forward, with a high degree of correlation with crude oil prices, the pair is likely to derive its near-term direction from Tuesday's API data on weekly crude oil inventories ahead of the official EIA report on Wednesday. 

In the meantime, the pair could provide some short-term trading opportunities with the releases of final Q1 US GDP print and Consumer Confidence index for June, scheduled during NY trading session.

Technical level to watch

Bulls might continue to defend 50-day SMA immediate support around 1.2940-35 region, which if broken seems to drag the pair below 1.2900 round figure mark, towards testing its next major support around 1.2850 area. Alternatively, momentum above 1.3030 immediate resistance might continue to face stiff resistance at 100-day SMA, near 1.3100 region. Strong bullish momentum above 100-day SMA seems to immediately boost the pair towards May highs resistance around 1.3170-75 zone.