“¢ The USD remained supported by the recent uptick in the US bond yields.
“¢ A combination of factors weighs on Loonie and provided an additional boost.
“¢ This week’s BoC/monthly jobs report might provide a fresh directional impetus.
The USD/CAD pair caught some fresh bids on Tuesday and climbed to 5-week tops, around the 1.3335-40 region in the last hour.
A combination of supporting factors helped the pair to regain positive traction during the Asian session and built on last week’s late upsurge, triggered by dismal Canadian GDP growth figures.
The commodity-linked currency – Loonie was further weighed down by a modest pull-back in crude oil prices and the latest news that China has blocked canola shipments from Canada’s Richardson International.
Meanwhile, the recent uptick in the US Treasury bond yields continued underpinning demand for the US Dollar and further collaborated to the pair’s positive tone for the fourth consecutive session.
The uptick, however, seemed to lack any strong bullish conviction as traders still seemed reluctant to place any aggressive bets ahead of the latest BoC monetary policy update on Wednesday.
This coupled with the closely watched monthly jobs report from the US (NFP) and Canada, scheduled for release on Friday, will play an important role in determining the pair’s next leg of a directional move.
In the meantime, today’s US economic docket, highlighting the release of ISM non-manufacturing PMI, might produce some short-term trading opportunities later during the early North-American session.
Technical levels to watch
A follow-through buying has the potential to lift the pair through Jan. swing high resistance near the 1.3375 region towards reclaiming the 1.3400 round figure mark. On the flip side, the 1.3300 handle now seems to act as an immediate resistance and is followed by the overnight swing low, around the 1.3275-70 region, which if broken might accelerate the slide towards the 1.3230 intermediate support en-route the 1.3200 round figure mark.
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