USD/CAD eases from daily tops, 1.3300 handle now seemed to cap gains

   “¢   The continuation of the recent USD rally to six-week tops helped regain traction on Monday.
   “¢   A follow-through weakness in oil prices further undermine Loonie and remain supportive.

The USD/CAD pair caught some fresh bids on Monday, albeit seemed struggling to build on the momentum and move back above the 1.3300 handle.

Combinations of supporting factors helped the pair to regained positive traction at the start of a new trading week and recover a part of Friday’s losses, recorded in the aftermath of solid Canadian jobs data.

Despite the recent dovish tilt by the Federal Reserve, the US Dollar climbed to near six-week highs amid resurfacing US-China trade tensions and was seen as one of the key factors lending some support to the major.  

Meanwhile, WTI crude oil prices added to last week’s slump of nearly 5% and lost some additional ground on Monday, which further undermined the commodity-linked currency – Loonie and remained supportive.

However, the ongoing slide in the US Treasury bond yields kept a lid on any runaway USD rally, which coupled with a modest rebound in oil prices now seemed to collaborate towards capping gains for the major.

It would now be interesting to see if the pair is able to attract any fresh buying interest at the focus remains glued to another round of US-China trade talks on Thursday and Friday in Beijing.

Market expectations over a possible trade deal remain low especially after the US President Donald Trump confirmed on Thursday that he will not meet Chinese President Xi Jinping before a March 1 tariffs deadline.

Moving ahead, there isn’t any major market-moving economic data due for release either from the US or Canada and hence, the USD/oil price dynamics might continue to act key determinants of the pair’s momentum on Monday.

Technical levels to watch