USD/CAD drops below 1.4100 as oil’s rally pleases the bears

• USD/CAD declines to the intraday low as oil rises further beyond $30.00.
• US-China tussle, Fed Chair Powell’s comments fail to propel the quote.
• Virus fears keep the declines limited amid a light calendar.

Following its early-Asian U-turn from Friday’s recoveries, USD/CAD declines to the intraday low of 1.4083, down 0.18% on a day, amid the initial trading session on Monday. The pair seems to have taken clues from oil’s latest run-up while ignoring the broad US dollar strength.

WTI June Futures on NYMEX registers three-day winning streak while taking bids near $30.77, up 4.20% on a day, by the press time. The oil benchmark is likely driven by the recently upbeat comments from the Fed Chair Jerome Powell.

During his latest “60 minutes” interview on the US TV, the Fed policymaker renewed hopes of the world’s largest economy’s recovery while pouring cold water on negative rate expectations.

It should also be noted that the US-China tussle intensifies to a new level with each side using the words line “super-duper missiles” and “nuclear weapon”.

Even so, the market’s risk-tone remains mildly positive with the US 10-year Treasury yields gaining 0.8 basis points (bps) to .648% whereas stocks in Asia also flash upbeat signals.

While most of the early-day catalysts are out and loud, the pair traders may keep eyes on the oil price moves, as well as trade and virus updates, for fresh impulse.

Technical analysis

A four-week-old falling trend line, currently near 1.4125, restricts the pair’s immediate upside ahead of the monthly top near 1.4175. On the downside, a weekly support line near 1.4045 can stop the bears before offering them 1.4000 mark.