USD/CAD consolidates overnight strong gains, holds above mid-1.3000s

   •  Seen building on overnight solid rebound from 100-day SMA support.
   •  The up-move seemed unaffected by subdued USD price-action.

The USD/CAD pair traded with a mild positive bias for the second consecutive session and was seen consolidating overnight strong recovery gains to one-week tops, just above mid-1.3000s.

On Tuesday, the pair staged a solid rebound and rallied over 100-pips from the 1.2965-60 region. The up-move seemed largely unaffected by the ongoing US Dollar profit-taking slide, with a combination of factors exerting downward pressure on the Canadian Dollar and prompting some aggressive short-covering move from the very important 100-day SMA support. 

The initial leg of recovery move was triggered by the disappointing release of Canadian Ivey PMI, which fell sharply to 56.7 in July from 65.1 in June. This coupled with a modest retracement in oil prices, following the release of EIA's monthly report that showed an expected rise in crude oil production to 1.02 million barrels per day in 2019, further weighed on the commodity-linked currency - Loonie and collaborated to the pair's goodish rebound.

The positive momentum extended through the early European session as market participants now look forward to the release of Canadian building permits and weekly US crude oil inventories data. This coupled with Richmond Fed President Thomas Barkin's scheduled speech might provide some meaningful trading opportunities later during the early North-American session.

Technical levels to watch

The ongoing up-move could get extended towards the 1.3090-1.3100 region, above which the pair is likely to head towards challenging the 1.3170-75 supply zone. Conversely, the 1.3040-30 area now seems to protect the immediate downside, which if broken might turn the pair vulnerable to break back below the key 1.30 psychological mark and head towards retesting the 1.2965-60 support zone.