“¢ Retracing US bond yields prompt some fresh USD weakness and capped the initial uptick.
“¢ Pickup in crude oil prices provide a minor boost to Loonie and exert additional pressure.
The USD/CAD pair extended its rejection slide from the 1.3200 neighborhood and dropped to fresh session low in the last hour, eroding a part of previous session’s recovery gains.
With investors still mindful of the US President Donald Trump’s criticism over the Fed’s monetary tightening, retracing US Treasury bond yields prompted some fresh US Dollar weakness and did little to assist the pair to build on the early uptick.
Adding to this, a modest uptick in crude oil prices provided an additional boost to the commodity-linked currency – Loonie and further collaborated to the pair’s retracement slide to an intraday low, back below mid-1.3100s.
It would now be interesting to see if the pair is able to find any fresh buying interest at lower levels or the current pull-back marks the resumption of the prior depreciating move as traders now look forward to the release of flash US manufacturing and services PMI.
The key focus, however, would be on this week’s other important US macro data – durable goods orders and advance GDP growth figures, which would help determine the pair’s next leg of directional move.
Technical levels to watch
The 1.3115 area might continue to act as an immediate strong support, below which the pair is likely to accelerate the fall towards 50-day SMA support near the 1.3085 region. On the flip side, the 1.3190-1.3200 region now seems to have emerged as an immediate hurdle, which if cleared might trigger a short-covering bounce towards 1.3240 area en-route 1.3275-80 supply zone.
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