- USD/CAD opened with a bearish gap in reaction to the OPEC+ deal.
- Oil prices failed to preserve early gains and weighed on the loonie.
- The prevailing risk-off mood extended some support to the US dollar.
The USD/CAD pair struggled to register any meaningful recovery and remained well within the striking distance of over one-month lows set earlier this Monday.
A combination of diverging forces failed to provide any meaningful impetus to the pair and led to a subdued/range-bound trading action through the early European session on the first day of a new week.
The US dollar remained depressed in the wake of the Fed’s announcement to provide additional loans of up to $2.3 trillion to support the economy and softer US consumer inflation figures released on Friday.
The negative factor, to a larger extent, was negated by a sharp intraday pullback in crude oil prices, which undermined demand for the commodity-linked currency – loonie and extended some support.
The latest optimism over the OPEC+ deal to lower output turned out to be short-lived amid concerns that the cut won’t be enough to counter an unprecedented demand loss from the COVID-19 disaster.
This coupled with a fresh wave of the global risk-aversion trade benefitted the greenback’s relative safe-haven status against its Canadian counterpart and provided a modest intraday lift to the major.
In the absence of any major market-moving economic releases, either from the US or Canada, the USD/oil price dynamics will continue to play a key role in influencing the pair’s momentum on Monday.
Technical levels to watch
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