“¢ The USD held on the defensive in wake of Friday’s weaker details from the US GDP report.
“¢ Follow-through weaknesses in oil prices undermine Loonie and extended some support.
“¢ Traders now eye the release of US core PCE price index for some short-term opportunities.
The USD/CAD pair regained some positive traction at the start of a new trading week and recovered a part of Friday’s US GDP-led corrective slide from the key 1.3500 psychological mark.
The US Bureau of Economic Analysis reported on Friday that the economy is estimated to have expanded by 3.2% annualized pace during the first quarter of 2019 but was largely offset by the fact that the growth was primarily driven by temporary factors such as inventory buildup and government spending.
This coupled with weaker price data triggered a sharp intraday slide in the US Treasury bond yields and prompted some long-unwinding trade amid a modest US Dollar pullback from fresh 2019 highs, albeit a selloff in oil prices undermined the commodity-linked currency – Loonie and helped limit deeper losses.
The greenback held on the defensive through the early European session on Monday, though bulls took cues from a follow-through weakness in crude oil prices, which added to the previous session’s steep decline that came after the US President Donald Trump asked OPEC cartel to raise output and lower oil prices.
Moving ahead, today’s US economic docket, highlighting the release core PCE price index – the Fed’s preferred inflation gauge, will now be looked upon for some short-term trading opportunities ahead of the latest FOMC monetary policy update on Wednesday.
This followed by the closely watched US monthly jobs report – popularly known as NFP, scheduled for release on Friday will further contribute towards determining the pair’s next leg of a directional move.
Technical levels to watch
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