“¢ The USD remains on the defensive amid growing Fed rate cut bets.
“¢ Oil prices stabilize after Wednesday’s slump and underpinned Loonie.
“¢ Traders now eye second-tier US/Canadian data for some impetus.
The USD/CAD pair failed to capitalize on the overnight bounce from two-week lows and was seen trading in a narrow band, just above the 1.3400 handle through the early European session on Thursday.
As investors looked past Wednesday’s disappointing release of the US ADP report, upbeat US ISM non-manufacturing PMI provided a much-needed respite to the US Dollar bulls and assisted the pair to reverse an early dip to the 1.3360 area.
Adding to this, the latest leg of a slump in Crude Oil prices on Wednesday weighed heavily on the commodity-linked currency – Loonie and further collaborated to the pair’s goodish intraday short-covering bounce of around 70-pips, further beyond the 1.3400 mark.
Meanwhile, the USD lacked any strong follow-through amid firming expectations that the Fed will be forced to deliver interest rate cut(s) by the end of this year. This coupled with some stability in Oil prices kept a lid on any subsequent up-move for the major.
It would now be interesting to see if the pair is able to attract any fresh buying interest as market participants now look forward to Canadian trade balance data and second-tier US economic releases for a fresh impetus later during the early North-American session.
Technical levels to watch
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