- USD/CAD shows a lack of momentum near the multi-week bottom.
- Mixed clues concerning that US-China trade, the tension in the Middle East fail to provide any direction to the pair.
- US activity and housing data can offer intermediate moves ahead of Tuesday’s China PMI.
USD/CAD registers modest changes to 1.3075 amid the early Monday’s sparse trading. The Loonie pair recently dropped to the lowest since October 29 on Friday. However, a lack of clarity surrounding the US-China trade and no major reaction of the US “defensive strikes” trouble traders at the moment.
Be it market’s cautious optimism towards the phase-one or a lack of response to the US strikes on Iraqi and Syrian spots, the pair shrugs them off amid the year-end trading lull. The reason could also be attributed to the lack of major data/events.
Market’s risk tone stays a bit lighter with the US 10-year treasury yields taking the bids to 1.884% while S&P 500 Futures also rising 0.12% by the press time to 3,241.
Looking forward, November month Pending Home Sales and the December month data for Chicago Purchasing Managers’ Index (PMI) and Dallas Fed Manufacturing Business Index from the US will be the immediate catalyst to watch. While the housing number is expected to revive from -1.7% to +1.5% YoY, activity gauges are also likely to recover from the previous downbeat figures.
Even so, traders will follow the outcome with a pinch of salt ahead of Tuesday’s official PMIs from China. The upbeat prints of November month push traders to keenly await December month data for near-term direction.
Technical Analysis
An upward sloping trend line since July 19, at 1.3055 now, could restrict the pair’s further declines. Though, bearish bias can’t be ruled out unless prices break the descending trend line from early September around 1.3305.
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