- Loonie fails to benefit from the prevailing bullish sentiment surrounding Oil prices.
- Bulls shrug off a subdued USD demand amid a sharp slide in the US bond yields.
The USD/CAD pair edged higher at the start of a new trading week, albeit remained well within a broader trading range held over the past one week or so.
As investors looked past Friday’s weaker Canadian retail sales data, the pair continued its struggle to extend the momentum further beyond the 1.3300 handle and once again faced rejection near the very important 200-day SMA amid the prevalent bullish sentiment surrounding Crude Oil prices.
Regains traction despite bullish Oil prices
Oil prices remained well supported by the recent escalation of geopolitical tensions in the Middle East, especially five Yemeni civilians were killed in airstrikes by the Saudi-led coalition and the US President Donald Trump’s announcement that they have sanctioned the Iranian National Bank.
However, the commodity-linked currency – Loonie failed to capitalize on a follow-through uptick in Crude Oil prices, with bulls even shrugging off a subdued US Dollar price action – weighed down by a fresh leg of a downfall in the US Treasury bond yields amid fading US-China trade optimism.
It will now be interesting to see if the pair is able to build on the intraday uptick and finally make it through the mentioned barrier or once again meets with some fresh supply at higher levels amid absent relevant market-moving economic releases – either from the US or Canada.
Apart from the USD/Oil price dynamics, traders might further take cues from scheduled speeches by influential FOMC members – New York Fed President John Williams and St. Louis Fed President James Bullard – in order to grab some short-term opportunities.
Technical levels to watch
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