- Rebounding US bond yields helped ease the recent USD bearish pressure.
- Positive Oil prices underpin Loonie and kept a lid on any strong up-move.
The USD/CAD pair filled the weekly bearish gap and is currently placed at the top end of its daily trading range, albeit remained well below the 1.3400 handle.
The pair added to last week’s heavy losses, further aggravated by Friday’s diverging US-Canadian monthly employment details, and opened with a bearish gap below the very important 200-day SMA amid the latest optimism led by the US President Donald Trump’s announcement to suspend tariffs on Mexico.
The encouraging trade development boosted investors’ appetite for perceived riskier assets and was evident from a solid turnaround in the US Treasury bond yields, which helped recede the recent US Dollar selling pressure and helped limit further losses, at least for the time being.
The pair recovered around 30-35 from an intraday low level of 1.3240, albeit lacked strong bullish conviction on the back of a slightly positive tone around Crude Oil prices, which turned out to be one of the key factors underpinning the commodity-linked currency – Loonie and capping any further gains.
Monday’s US economic docket features the only release of JOLTS jobs opening data and seems unlikely to provide any meaningful impetus, leaving the pair at the mercy of the USD/Oil price dynamics ahead of this week’s other important US macro data – the latest consumer inflation figures and monthly retail sales data.
Technical levels to watch
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