USD/CAD holding above 1.3000 but seems stuck in a trading range

The USD/CAD pair remained stuck in a narrow trading range between 100-day and 50-day SMAs and is currently trading flat, holding stable above 1.3000 psychological mark at 1.3030 level.

On Tuesday, the pair extended its reversal from 100-day SMA resistance but erased majority of its early losses to 1.2965 region, confirming a strong support at 50-day SMA region. Tuesday's reversal was despite of a broad based selling pressure around the greenback. The recovery momentum gained traction after the release of better-than-expected US GDP print and Consumer Confidence index. The pair, however, failed to extend the momentum as a sharp recovery in crude oil prices was seen supporting the Canadian Dollar. 

Oil traders now turn their focus towards the official EIA report on weekly US crude oil inventories data, scheduled later during NY trading session, which would portray the current demand-supply scenario and drive sentiment surrounding the USD/CAD pair. Consensus estimates are expecting inventories to decline further by 2.3 million barrels.

Technical levels to watch

It would be prudent to wait for a decisive break-out of the recent trading range before taking near-term directional bets. Above 100-day SMA resistance, near 1.3100 region, the pair seems to immediately dart towards May highs resistance around 1.3185-90 region before the pair extends its bullish momentum towards March highs resistance around 1.3280-85 zone. On the flip side, sustained weakness below 50-day SMA support near 1.2940 region has the potential to drag the pair immediately below 1.2900 handle, towards 1.2840 horizontal support. Below 1.2900 handle, the bearish momentum seems to get extended towards a short-term ascending trend-line support near 1.2755-50 region.