“¢ Persistent USD weakness/rebounding oil prices kept a lid on any meaningful up-move.
“¢ Resurgent US bond yields offset negative factors and help limit any deeper downfall.
The USD/CAD pair continued with its range-bound price action through the early North American session and remained confined within a narrow trading band, around mid-1.2900s.
The pair struggled to build on overnight sharp rebound from 50-day SMA support or one-week lows and was being capped by the prevailing bearish sentiment surrounding the US Dollar.
This coupled with a goodish rebound in crude oil prices provided an additional boost to the commodity-linked currency – Loonie and further collaborated towards keeping a lid on any meaningful up-move for the major.
However, a goodish pickup in the US Treasury bond yields, with the benchmark 10-year yield closing into the key 3.0% psychologically important level, which although failed to revive the USD demand, helped limit any deeper downfall.
Meanwhile, investors also seemed reluctant to place any aggressive bets ahead of today’s release of BOC Financial System Review and BOC Governor Stephen Poloz’s scheduled speech, which might provide some clues over the central bank’s monetary policy outlook and eventually provide some fresh directional impetus.
Technical levels to watch
Immediate resistance is pegged near the 1.2965-70 region, above which the pair is likely to make a fresh attempt towards reclaiming the key 1.30 psychological mark. On the flip side, any meaningful retracement now seems to find support near the 1.2900 handle, which if broken might turn the pair vulnerable to head back towards retesting 50-day SMA support near the 1.2955-50 region.
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