“¢ Surging US bond yields supportive of the prevalent USD bullish move.
“¢ Pickup in oil prices underpin Loonie and seemed to cap strong gains.
“¢ A sustained move beyond 1.30 needed for further near-term up-move.
The USD/CAD pair traded with a mild positive bias for the sixth consecutive session, albeit remained well below overnight swing high level of 1.3010.
After yesterday’s late retracement from levels beyond the key 1.30 psychological mark, or over one-week tops, the pair caught some fresh bids on Tuesday amid renewed US Dollar buying interest supported by the ongoing upsurge in the US Treasury bond yields.
Firming prospects for gradual Fed rate hike through the end of this year, and beyond, pushed yields on the benchmark 10-year government bond to a fresh multi-year high level of 3.261% and remained supportive of the prevailing bullish sentiment surrounding the greenback.
The uptick, however, lacked strong conviction/follow-through and was being capped by a goodish pickup in crude oil prices. In fact, WTI crude oil climbed back closer to the $75.00/barrel mark, which underpinned the commodity-linked Loonie and eventually kept a lid on any meaningful up-move for the major.
It would now be interesting to see if bulls are able to maintain their dominant position or the pair continues with its struggled to build on/sustain strength above the 1.30 handle amid absent relevant market moving economic releases.
Technical levels to watch
The 1.3000-1.3010 region might continue to act as an immediate resistance, above which the momentum could further get extended towards the 1.3040 supply zone. On the flip side, the 1.2950 region now seems to protect the immediate downside, which if broken is likely to accelerate the fall back towards the 1.2900 round figure mark.
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