- Crude oil sell-off weighs on the loonie.
- 10-year US T-bond yield falls more than 1%.
- US Dollar Index stays in red below 96.50.
The USD/CAD pair advanced to its highest level since March 8 at 1.3447 in the early NA session but failed to push higher with the commodity-sensitive loonie struggling to attract investors amid falling crude oil prices. At the moment, the pair is trading at 1.3430, gaining 0.05% on a daily basis.
Escalating concerns over the negative impact of a recession in the U.S., which is believed to be signalled by the falling T-bond yields, and the dismal global economic outlook’s on demand for crude oil, the barrel of West Texas Intermediate extended its slide on Monday and slumped to a weekly low of $58.15 before recovering modestly, As of writing, the barrel of WTI was trading at $58.55, losing 0.5% on a daily basis.
Meanwhile, today’s data from the U.S. showed that the Chicago Fed National Activity Index edged down to -0.29 in February and the Dallas Fed Manufacturing Index eased to 8.3 in March from 13.1. Pressured by the mixed data, the US Dollar Index struggled to build on last Friday’s gains and was last seen posting small daily losses a little below 96.50.
Friday’s GDP report will be the only significant data scheduled to be released from Canada and will be watched closely by the market participants especially after the last monthly GDP reading showed a contraction of 0.1% in January.
Key technical levels
The pair could face the initial resistance at 1.3465 (Mar. 6 high) ahead of 1.3500 (psychological level) and 1.3530 (Dec. 20 high). On the downside, supports are located at 1.3400 (daily low), 1.3350 (Mar. 22 low) and 1.3290 (Mar. 13 low).