USD/CAD finds resistance at 1.3320 and drops back below 1.3300

• USD/CAD back into negative territory, holds a bearish bias.
• Loonie supported by risk appetite and Canadian data.

The USD/CAD dropped back below 1.3300 after making a run to 1.3320. As of writing, it trades at 1.3295 modestly lower for the day, holding a bearish tone but moving sideways for the session.

The loonie was among the weakest in the G10 space but after the beginning of the American session it recovered ground across the board, even as crude oil prices tumbled. The WTI barrel is falling by more than 5%.

Also equity prices pulled back and are still higher but off highs. The Dow Jones gains 0.25% and the Nasdaq 0.82%. Risk appetite is weakening the US dollar that is posting mixed results. The greenback was not affected by US economic data released on Thursday that included jobless claims, ISM and Markit manufacturing. On Friday, the NFP report is due.

In Canada, the Markit Manufacturing PMI rose in September to 56 from 55.1, despite expectations of a decline to 54.1. The number helped the loonie.

Technical outlook

The USD/CAD is moving sideways on Thursday between 1.3320 and 1.3280. Momentum favors the downside, but in order to clear the way to more losses, it needs to break the support at 1.3280. On the upside, if the pair consolidates above 1.3330, the negative bias in the very short-term would be negated.