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   “¢   Escalating US-China trade tensions keep the USD bulls on the defensive.
   “¢   Weaker oil prices offset persistent USD weakness and fail to provide any impetus.
   “¢   Traders look forward to the US/Canadian jobs data for the required momentum.

The USD/CAD pair extended its consolidative price action and remained capped below mid-1.3100s ahead of the US/Canadian monthly jobs data.  

The pair held within striking distance of near three-week lows, with a combination of diverging forces failing to provide any meaningful impetus through the mid-European session on Friday.

Escalating trade tensions between the world’s two-largest economies was seen taking some toll of the US Dollar and has failed to assist the pair to register any meaningful recovery/attract any buying interest at lower levels.  

The US-China trade war officially began this Friday after the US tariffs on $34 billion worth of Chinese goods went into effect at 0400 GMT and China retaliated by applying tariffs to the same value of US goods at the same rate.  

The bearish factor, to a larger extent, was negated by retracing crude oil prices, which was seen denting demand for the commodity-linked currency – Loonie and has eventually led to a subdued/range-bound price action.

Traders now look forward to the release of keenly watched US non-farm payrolls data, which along with the Canadian monthly jobs report should provide the required momentum to finally help the pair to break through the recent range held over the past three trading sessions.

Technical levels to watch

The 1.3115-10 region might continue to protect the immediate downside, which if broken is likely to accelerate the fall towards 1.3065-60 intermediate support en-route the key 1.30 psychological mark (50-day SMA).

On the flip side, the 1.3155-60 area now seems to have emerged as an immediate hurdle, which if cleared might trigger a short-covering bounce back towards the 1.3200 handle ahead of the 1.3225 level (weekly tops).