- The USD remains depressed despite a goodish pickup in the US bond yields.
- An intraday uptick in oil prices underpinned loonie and adds to the selling bias.
The USD/CAD pair maintained its heavily offered tone through the early North-American session and tumbled to fresh multi-week lows, around the 1.3115 region in the last hour.
The pair added to last week’s heavy losses and continued losing ground on the first day of a new trading week, marking its fifth day of a negative move in the previous six amid persistent selling bias surrounding the US dollar.
The US dollar failed to attract any buying interest despite a goodish pickup in the US Treasury bond yields, supported by the prevalent risk-on mood on the back of the latest optimism over the phase one US-China trade deal.
It is worth recalling that under the deal, the US President Donald Trump vowed not to pursue a new round of tariffs, which were set for Sunday, and China, in turn, said it would substantially increase agricultural purchases.
Apart from the broad-based USD weakness, a modest intraday uptick in crude oil prices underpinned the commodity-linked currency – loonie and further collaborated to the pair’s slide to the lowest level since early November.
This coupled with possibilities of some follow-through technical selling on a sustained break below a horizontal support near mid-1.3100s seemed to have aggravated the bearish pressure since the early European session on Monday.
Moving ahead, market participants now look forward to the US economic docket, highlighting the releases of flash Manufacturing and Services PMI prints for December, in order to grab some short-term trading opportunities.
Technical levels to watch
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