- USD/CAD fails to extend Friday’s recovery, stays below the 12-week-old resistance line.
- Hong Kong election results fail to counter doubts over phase two deal between the US and China.
- The pullback in oil prices adds to the lack of performance.
Given the mixed trade headlines, not to forget indecision among oil traders, USD/CAD seesaws around 1.3295 during Monday’s Asian session.
News that pro-Democratic candidates are up for a huge victory in Hong Kong’s district election recently favored market’s risk tone. However, the Reuters’ story, relying on official from the United States (US) and China, raise doubts on the phase two level deal between the US and Beijing, which in turn challenges the trade sentiment.
Prior to that, the US President Donald Trump increased the odds of a successful phase one deal with China. However, the Trump administration’s emphasis on the Hog Kong bill, which was recently passed by the Congress, risks another round of US-China political tussle.
It’s worth mentioning that the US 10-year Treasury yields takes rounds to 1.783% while S&P 500 Futures also rise by 0.30% to 3,120 by the press time.
Further, oil prices ignore threats from Iran and a consecutive fifth week of decline in the Baker Hughes US rig counts amid mixed trade headlines.
While Chicago Fed National Activity Index and Dallas Fed Manufacturing Index for October and November month respectively will occupy the US economic calendar, September month Wholesale Sales from Canada could also entertain the USD/CAD pair traders.
Technical Analysis
Unless providing a daily closing beyond multi-week-old resistance trend line, at 1.3310 now, buyers are less likely to aim for the previous month high near 1.3350 and the September month top close to 1.3385. As a result, the 21-day Exponential Moving Average (EMA) level of 1.3230 stays on the short-term seller’s radar during the pair’s pullback.
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