- Recovering US bond yields/trade optimism provided a strong lift to the USD.
- Weaker Oil prices undermined Loonie and remained supportive of the up-move.
- A sustained move beyond 200-DMA needed to confirm a near-term bullish bias.
The USD/CAD pair maintained its strong bid tone through the early North-American session and refreshed daily tops, around the 1.3275-80 region in the last hour, albeit lacked follow-through.
The pair has been showing some resilience below mid-1.3200s over the past one week or so and managed to regain some positive traction on Wednesday amid a combination of supporting factors – including resurgent US Dollar demand and a follow-through pullback in Crude Oil prices.
Stronger USD/sliding Oil prices remain supportive
As investors digested the overnight reports on the launch of an impeachment inquiry against the US President Donald Trump, encouraging trade-related developments and a goodish pickup in the US Treasury bond yields provided a strong boost to the greenback on Wednesday.
Meanwhile, Oil prices fell for the second consecutive session on Wednesday on concerns about global economic growth and receding fears of a further escalation of geopolitical tensions in the Middle East, which eventually weighed on the commodity-linked currency – Loonie and remained supportive.
It, however, remains to be seen if the pair is able to capitalize on the positive momentum or continues with its struggle to make it through the very important 200-day SMA barrier – near the 1.3300-1.3310 region – amid absent relevant market moving economic releases, either from the US or Canada.
Hence, it will be prudent to wait for a convincing breakthrough the mentioned barrier before traders start positioning aggressively for any further near-term appreciating move, possibly back towards monthly swing highs near the 1.3380-85 region, touched on September 3.
Technical levels to watch
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