- Friday’s post-NFP solid intraday bounce fizzles out rather quickly.
- Positive Oil prices underpin Loonie and add to the weaker tone.
The greenback held on the defensive against its Canadian counterpart, with the USD/CAD pair hanging within the striking distance of over eight-month lows set last week.
The pair did get a goodish lift on Friday and spiked to a near one-week high level of 1.3137 following the release of employment details from the US and Canada, though bulls failed to capitalize on the positive momentum.
The US Dollar rallied across the board after the headline NFP showed that the US economy added 224K new jobs in June, smashing consensus estimates by a big margin and forcing investors to scale back Fed rate cut bets.
Meanwhile, Statistics Canada reported that the number of employed people in Canada unexpectedly declined by 2,200 in June, which weighed on the Canadian Dollar and provided an additional boost to the intraday positive move.
The positive momentum, however, quickly fizzled out at higher levels, with the US President Donald Trump’s fresh criticism over the Fed’s policy tightening exerting some fresh pressure at the start of a new trading week.
This coupled with some renewed pickup in Crude Oil prices further underpinned demand for the commodity-linked currency – Loonie and collaborated to the pair’s slightly weaker tone through the early European session.
The price-action clearly suggests that the near-term bearish pressure might still be far from over and hence, a follow-through weakness, amid absent market-moving economic releases on Monday, now looks a distinct possibility.
Technical levels to watch