USD/CAD retreats from high despite of mildly weaker oil prices

The USD/CAD pair snapped three days of losing streak and staged a tepid recovery on Monday, albeit has retreated few pips from session peak. 

Currently trading around 1.3135 area, a broad based US Dollar recovery, from Friday's three-week low, helped the pair to defend the very important 200-day SMA, at least for the time being. Moreover, a mildly negative sentiment surrounding oil prices, with WTI crude oil correcting to $52.20 level, was seen weighing on the commodity-linked currency - Loonie, and collaborating with the pair's tepid recovery.

The recovery, however, lacked momentum amid lower-than-usual trading volumes in the Martin Luther King holiday in the US markets. Moreover, investors preferred to remain on the sidelines ahead of this week's key event risks - BOC monetary policy decision on Wednesday and President-elect Donald Trump’s inauguration on Jan. 20.

Technical levels to watch

A follow through retracement below 1.3115-10 immediate support now seems to find support near the very important 200-day SMA near 1.3095 region below which the pair is likely to head back towards testing last week's multi-month lows support near 1.3030 region.

On the upside, sustained move above session peak resistance near 1.3155-60 region is likely to accelerate the recovery move towards 1.3200 handle ahead of its next horizontal resistance near 1.3235-40 region.