- USD/CAD again bounces off sub-1.3400 area, remains on the back foot near the early-March low.
- WTI trades above $40.00, three-month high, following OPEC+ output cut extension.
- Friday’s US/Canada jobs data, weekend trade reports from China and receding protests in America add to the risk-on sentiment.
- Canadian Housing Starts will decorate the calendar, US-China headlines may direct near-term trades.
USD/CAD extends pullback move from 1.3392 to 1.3415 during Monday’s Asian session. In doing so, the Loonie pair trades near the lowest since March 06 as upbeat Crude oil prices join broad risk-on sentiment to please the bears.
WTI futures on NYMEX recently flashed the intraday high, also the highest since March 06, of $40.60 following the OPEC+ decision to extend 9.7 million barrels of a production cut by one more month till July-end.
Friday’s upbeat employment data from the US and Canada propelled hopes that the global economic recovery from the pandemic will be faster. Also supporting the Canadian dollar was the weekend news suggesting China’s record trade surplus.
On the contrary, China’s Global Times seems trying to reignite the Sino-American tussle by turning down the US push for removing tariffs on exports of lobsters.
Having said that, the US 10-year Treasury yield stays mostly unchanged to 0.90% whereas Japan’s NIKKEI rise over 1.0% to 23,120 by the time of writing.
Looking forward, Canada’s May month Housing Starts, expected 110K versus 171.3K prior, could offer immediate direction to the pair, as far as the economic calendar is concerned. Though, the major attention will be given to oil prices and the broad risk sentiment for fresh impulse.
Technical analysis
Even if oversold RSI conditions favor the Loonie pair’s pullback, 200-day SMA near 1.3465 can restrict the quote’s bounce. Alternatively, February 10 high of 1.3330 could lure the bears during further declines.
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