USD/CAD retreats back to 1.3320 after Canadian manufacturing sales

The USD/CAD pair once again failed to extend its recovery move beyond mid-1.3300s and retreated back to 1.3320 level during early NA session.

Spot ran through some fresh offers after Canadian manufacturing sales came-in to show an unexpected growth of 0.6% m-o-m for January. The reading was much better than 0.4% contraction expected but still showed a substantial drop as compared to a growth of 2.1% recorded in December. Nevertheless, the data did provide a minor lift to the Canadian Dollar. 

Moreover, a positive trading sentiment around oil markets, with WTI crude oil trading with gains of around 0.5%, further boosted demand for the commodity-linked currency - Loonie, and collaborated to the pair's retracement from session highs.

Meanwhile, a goodish greenback recovery move seems to extend some support and collaborated towards limiting further downslide, at least for the time being. In fact, the key US Dollar Index extended rebound from sub-100.00 level and is now placed at 100.20 region, helping the pair to hold with minor gains for the second consecutive session.

Next on tap would be US economic docket, featuring industrial production and prelim UoM consumer sentiment index, and should provide further impetus for short-term traders.

Technical levels to watch

Bulls would be eyeing for a decisive move through mid-1.3300s, above which the pair is likely to accelerate the recovery move towards 1.3375-80 horizontal resistance before surpassing the 1.3400 handle to test 1.3425-30 resistance area.

On the downside, a convincing break below 100-day SMA near the 1.3300 handle would turn the pair vulnerable to break below two-week lows support near 1.3275 level and head towards testing 1.3230 horizontal support.