USD/CAD eases from tops post-data, still positive around mid-1.2800s
• Upbeat Canadian RMPI prompts some long-unwinding trade.
• Broad-based USD strength/weaker oil prices help limit downside.
The USD/CAD pair held on to its daily gains, albeit retreated around 20-25 pips during the early NA session.
The pair stalled its up-move and lost some ground following the release of upbeat Canadian Raw Materials Price Index (RMPI), coming in to show a rise of 2.1% for March as against a contraction of 0.4% reported last month.
Meanwhile, the mostly in-line US economic data - personal income and PCE price index, remained supportive of the strong bid tone surrounding the US Dollar. This coupled with weaker crude oil prices, which tends to undermine demand for the commodity-linked currency - Loonie, further collaborated towards limiting any further downside below mid-1.2800s.
Today's US economic docket also features the release of Chicago PMI and might assist traders to grab some short-term opportunities. The key focus, however, would be on this week's highly anticipated FOMC decision and the keenly watched NFP, which would help investors determine the pair's next leg of directional move.
Technical levels to watch
Any subsequent retracement might continue to find support near the 1.2820-15 region (50-day SMA), below which the pair is likely to accelerate the slide towards 1.2770 horizontal support. On the upside, momentum beyond the 1.2870-75 region is likely to confront strong resistance near the 1.2900 handle, above which the pair seems all set to challenge the 1.2935-40 supply zone.