- The USD manages to attract some safe-haven flows amid deteriorating risk sentiment.
- Retreating Oil prices undermined Loonie and remained supportive of the positive move.
- A sustained move beyond 200-day SMA needed to confirm any near-term bullish bias.
The USD/CAD pair continued with its struggle to make it through the very important 200-day SMA and quickly retreated around 20-25 pips from the early European session swing high.
The pair managed to catch some fresh bids on the first day of a new trading week and got an additional boost from a combination of supporting factors – a goodish pickup in the US Dollar demand and a modest pullback in Crude Oil prices.
Weaker Oil/resurgent USD demand remain supportive
Concerns over the global economic growth reemerged on Monday following yet another disappointing release of Euro-zone PMI prints for September, which eventually boosted the greenback’s relative safe-haven status against its Canadian counterpart.
This coupled with an intraday slide in Oil prices, triggered by news that Saudi oil production is set to be restored by next week, further undermined demand for the commodity-linked currency – Loonie and provided an additional boost to the major.
Bulls, however, failed to capitalize on the intraday positive momentum and once again struggled to extend the momentum further beyond the 1.3300 round-figure mark, though the downside seems limited amid absent relevant fundamental triggers.
Moving ahead, market participants now look forward to scheduled speeches by influential FOMC policymakers – New York Fed President John Williams and St. Louis Fed President James Bullard – for some fresh impetus later during the US trading session.
Technical levels to watch
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