“¢ Weaker oil prices weigh on commodity-linked Loonie and helped regain traction.
“¢ A sharp fall in the US bond yields undermines the USD and seemed to cap gains.
The USD/CAD pair reversed an early European session dip and jumped back above the 1.3400 handle, back closer to the overnight swing high in the last hour.
A sudden deterioration in the global risk sentiment, as depicted by an intraday slide in equity markets, weighed on riskier asset class – including crude oil, and undermined demand for the commodity-linked currency – Loonie.
The recent US yield curve inversion, wherein 3-month bills are yielding more than 10-year government bonds – seen as a key signal of an impending recession in the world’s top economy, continued dampening investors’ risk appetite.
Meanwhile, the latest leg of a sharp slide in the US Treasury bond yields, triggered by the risk-off mood, failed to assist the US Dollar to preserve its intraday gains and now seemed to cap any further positive move.
Hence, it would be prudent to wait for a follow-through buying before positioning for any further intraday up-move towards retesting the 1.3440-45 supply zone amid absent relevant market moving economic releases.
Technical levels to watch
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