• A follow-through pullback in oil prices undermine Loonie and lend some support.
• The prevalent USD selling bias fails to provide any meaningful bullish impetus.
• Traders eye US data/ BoC’s Outlook Survey for some short-term opportunities.
The USD/CAD pair extended its sideways consolidative price action and remained confined in a narrow trading band, below mid-1.3300s.
The pair witnessed a sharp intraday pullback on the last trading day of the week amid a fresh leg of a broad-based US Dollar weakness but once again managed to find some support ahead of the 1.3300 handle in wake of a sharp pullback in crude oil prices, which tend to undermine demand for the commodity-linked currency – Loonie.
WTI crude oil retreated further from a fresh five-month high in the previous session and turned out to be one of the key factors that continued lending some support, albeit the positive factor, to a larger extent, was negated by a follow-through USD weakness, which led to a subdued/range-bound price action on Monday.
The greenback remained on the defensive and added to last week’s weakness – marking the first weekly loss since the week ending March 12, amid firming expectations that the Fed will hold interest rates steady through this year and was further pressurized by fresh optimism over a possible US-China trade deal in the near-future.
It would now be interesting to see if the pair continues to show some resilience at lower levels or finally finds bearish acceptance below the 1.3300 mark to confirm a near-term bearish breakdown as the focus now shifts to the release of BoC’s Business Outlook Survey, due later during the early North-American session.
Ahead of key release, the US economic docket – featuring the only release of Empire State Manufacturing index for the month of April, might also be looked upon for some short-term trading impetus.
Technical levels to watch