“¢ The USD positive momentum runs out of steam amid weaker US bond yields.
“¢ Weaker crude oil prices weigh on Loonie and helped limit further downside.
The USD/CAD pair continued with its steady climb through the early North-American session and refreshed session tops in the past hour, albeit retreated few pips thereafter.
The pair once again managed to find decent buying interest near the 1.3055-50 region and managed to recover a part of Friday’s steep decline, triggered by hotter-than-expected Canadian consumer inflation figures.
The early leg of rebound was supported by a goodish pickup in the US Dollar demand. This coupled with a slightly negative tone around crude oil prices further weighed on the commodity-linked currency – Loonie and provide an additional boost.
The USD, however, struggled to build on its positive momentum and was being capped by the ongoing slide in the US Treasury bond yields, with the pair quickly retreating around 15-20 pips from the 1.3100 neighborhood. The benchmark 10-year yield is now down over 1% for the day, at 2.841%, and was seen as the only factors capping gains for the buck.
It would now be interesting to see if bulls continue to defend the 1.3050 horizontal support area as traders look to comments from BoC Senior Deputy Governor Carolyn Wilkins and Atlanta Fed President Raphael Bostic for some fresh impetus.
Technical levels to watch
The 1.3055-50 region might continue to protect the immediate downside, which if broken might turn the pair vulnerable to slide further towards testing the key 1.30 psychological mark en-route 100-day SMA support near the 1.2980 region.
On the flip side, the 1.3095-1.3100 region now seems to have emerged as an immediate hurdle, above which the pair is likely to aim back towards challenging the 1.3170-75 supply zone with some intermediate resistance near 1.3155 area.
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