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USD/CAD attempting a rebound from 50-DMA support Haresh Menghani

The USD/CAD pair remained stuck within a broad trading range and is now attempting a rebound from the lower end of the trading range support at 50-day SMA region to currently trade near mid-point of 1.2900 handle. On Thursday, the pair dipped lower despite of weaker crude oil prices as the Canadian Dollar gained traction after the release of in-line with expected monthly GDP print and higher-than-expected price of raw materials purchased by manufacturers. A steeper-than-expected rise in raw material prices pointed to a possible uptick in consumer inflation, which might now dent expectations of further BOC easing. Further downfall, however, after the greenback witnessed a broad recovery on upbeat Chicago manufacturing PMI data.On Friday, the pair is being boosted by a minor up-tick in global risk-aversion led by weak Chinese manufacturing PMI data that is seen boosting safe-haven appeal of the US Dollar.Investors now turn their focus towards US ISM manufacturing PMI, due later during NY trading session, in order to determine further direction for the pair. In the meantime, sentiment surrounding crude oil prices might continue to drive the pair during European trading session.Technical levels to watchBears seem to wait for a decisive break below 50-day SMA support, around 1.2920-1.2900 region, below which the pair is likely to drop immediately towards a short-term ascending trend-line support near 1.2800 level. A follow through selling pressure below 1.2800 level now seems to turn the pair vulnerable to further downslide in the near-term.Alternatively, momentum above 1.3000 psychological mark might continue to confront strong resistance near 100-day SMA, currently near 1.3050 region, which if conquered decisively should open room for further near-term appreciating move for the pair.



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