“¢ CAD continues to be weighed down by Friday’s dismal Canadian GDP.
“¢ A modest pickup in the USD demand provides an additional boost.
“¢ The uptick remains unaffected by a positive tone around oil prices.
The USD/CAD pair built on its positive momentum further beyond the 1.3300 handle and climbed to over two-week tops in the last hour.
After a weekly bearish gap of around 25-pips, the pair managed to regain positive traction and built on Friday’s dismal Canadian GDP figures-led strong rally of over 175-pips from an intraday low level of 1.3130.
A fresh wave of US Dollar buying since the early European session, following the NY Times news report that Huawei is preparing to sue the US government, was seen as one of the key factors driving the pair higher.
Meanwhile, a goodish pickup in crude oil prices, which tend to underpin demand for the commodity-linked currency – Loonie, did little to hinder the uptick, though might keep a lid on any strong follow-through up-move.
The Canadian Dollar was further weighed down by the report, via Bloomberg, wherein Enbridge Inc. now expects the replacement and expansion of its Line 3 crude oil pipeline to be in service about a year later than expected.
In absence of any major market moving economic releases, either from the US or Canada, the pair remains at the mercy of USD price dynamics as the market attention shifts to this week’s important event/data risks.
The BoC is scheduled to announce its latest monetary policy update on Wednesday, which followed by the closely watched monthly jobs report from the US (NFP) and Canada will help determine the pair’s near-term trajectory.
Technical levels to watch
Any subsequent up-move is likely to confront some fresh supply near the 1.3340 area, above which the pair seems more likely to accelerate the up-move towards reclaiming the 1.3400 round figure mark. On the flip side, weakness back below the 1.3300 handle now seems to find support near the 1.3275 region, which if broken might turn the pair vulnerable to head back towards testing the 1.3230 horizontal support.
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