“¢ Renewed trade tensions weigh on the USD and prompt some fresh selling.
“¢ An uptick in the US bond yields/subdued oil price action helps limit deeper losses.
The USD/CAD pair maintained its weaker tone through the early North-American session, albeit seems to have found decent support at the 1.2900 handle.
With investors looking past Friday’s upbeat US monthly jobs report, the US Dollar came under some renewed selling pressure on Monday and was being weighed down by escalating trade tensions.
Despite a modest uptick in the US Treasury bond yields, expectations of retaliatory action over the latest US steel and aluminium tariffs kept exerting downward pressure on the greenback and prompted some fresh selling around the major.
However, a subdued action around crude oil prices failed to provide any additional boost to the commodity-linked currency – Loonie and turned out to be the only factor, which helped limit further downside, at least for the time being.
Having rebounded around 30-pips from lows, the pair remains at the mercy of USD/oil price dynamics amid a relatively thin US economic docket, featuring the release of factory orders data.
Technical levels to watch
Any subsequent recovery is likely to confront fresh supply near the 1.2955-60 region, above which the pair is likely to aim back towards reclaiming the key 1.30 psychological mark.
On the flip side, the 1.2900 handle now seems to have emerged as an immediate support, which if broken could accelerate the fall towards 1.2865 intermediate level en-route the 1.2815-10 support area.
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