- USD/CAD added to last week’s post-BoC strong positive momentum.
- Weaker oil prices undermined the loonie and remained supportive.
The USD/CAD pair gained some follow-through traction on the first day of a new trading week and jumped to over one-month tops, around the 1.3180 region in the last hour.
The pair built on last week’s post-BoC breakout momentum and scaled higher for the second consecutive session on Monday – also marking its fourth day of a positive move in the previous five.
A sharp fall in crude oil prices – amid concerns over the outbreak of the coronavirus – undermined demand for the commodity-linked currency – the loonie – and drove the pair higher on Monday.
USD/CAD supported by sliding oil prices
On the other hand, the US dollar remained supported by Friday’s data, showing that the Services PMI rose to the highest level since last March, and reviving demand for perceived safe-haven currencies.
Meanwhile, the anti-risk flow led to a slump in the US Treasury bond yields, which might hold the USD bulls from placing any aggressive bets and eventually keep a lid on any runaway rally for the major.
Hence, it will now be interesting to see if the pair is able to capitalize on the momentum or bulls opt to lighten their positions at higher levels amid absent relevant market-moving economic releases on Monday.
Technical levels to watch
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