“¢ USD fails to preserve/build on the rebound despite positive US bond yields.
“¢ Traders seemed unaffected by the ongoing bullish run in crude oil prices.
Having posted a session low level of 1.2912, the USD/CAD pair caught some fresh bids and built on Friday’s modest rebound from 3-1/2 month lows.
Currently hovering around the 1.2935-40 region, testing daily tops, the pair seemed rather unaffected by a combination of negative forces and traded with a mild positive bias for the second consecutive session.
Despite a strong follow-through uptick in the US Treasury bond yields, the US Dollar failed to preserve early gains and has now drifted into negative territory. Traders also seemed to have shrugged off the ongoing bullish run in crude oil prices, which tends to underpin demand for the commodity-linked currency – Loonie.
In fact, WTI crude oil prices surged to over two-month tops at the start of a new trading week, albeit did little to prompt any fresh selling and stall the pair’s ongoing steady bounce from the vicinity of the very important 200-day SMA support.
It, however, remains to be seen if the recovery move is backed by any genuine buying or is solely led by some short-covering as investors still await fact checks on the North American Free Trade Agreement (NAFTA).
Technical levels to watch
Immediate resistance is pegged near the 1.2975 horizontal zone, above which the pair seems all set to surpass the key 1.30 psychological mark and aim towards testing the 100-day SMA barrier near mid-1.3000s.
On the flip side, the 1.2900 handle now seems to protect the immediate downside, which is followed by support at multi-month lows, around 1.2985 area, and the 1.2870-65 region (200-day SMA).
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