By Ketki Saxena
Investing.com -- The Canadian dollar saw a slight uptick against its U.S. counterpart on Monday in a day of volatile trading, buoyed by domestic data revealing the most significant monthly surge in wholesale trade since November 2021.
A report from Statistics Canada indicated that Canadian wholesale trade escalated by 3.5% in May compared to April, positive data that contributed further proof of Canada's economic recovery during May.
However, the commodity-linked loonie's gains remained modest as crude prices slipped, driven by weak economic data from China.
"The price action implies that traders were capitalizing on the loonie’s new high as an opportunity to sell rather than prolonging the rally," said Jay Zhao-Murray, market analyst at Monex Canada Inc.
"This suggests that despite our medium-term bullish outlook, we anticipate a turbulent journey ahead with limited upside potential for the loonie over upcoming months."
Meanwhile, Monday saw minor losses posted for Greenback measured via US Dollar Index (DXY). These losses followed hawkish remarks from European Central Bank Governing Council member and Bundesbank President Nagel while lower Treasury yields also exerted pressure.
On a technical level for the pair, analysts at FX Street note, "If USD/CAD stays below 1.3200, first support emerges at 1.3150. A breach of the latter will expose the 1.3100 figure, followed by the year-to-date (YTD) low of 1.3092."
"Conversely, if USD/CAD buyers reclaim 1.3200, despite printing a bearish candle, that would expose the 20-day EMA at 1.3240. Once cleared, the USD/CAD would rally toward 1.3300, followed by the 50-day EMA at 1.3323, before testing the 200-day EMA at 1.3373."