“¢ Bullish oil prices underpin Loonie and prompt some fresh selling on Monday.
“¢ The USD holds stable near multi-week tops and helped limit further downside.
The USD/CAD pair came under some fresh selling pressure at the start of a new trading week and extended the previous session’s late pullback from three-week tops.
Having jumped to levels beyond the key 1.3500 psychological mark on Friday, the pair started losing steam in reaction to the news that the US was set to remove the steel and aluminium tariffs on Canada.
The retracement slide extended through the early part of Monday’s trading action and was further pressurized by a goodish pickup in Oil prices, which benefitted the commodity-linked currency – Loonie.
In fact, Oil is now up by around 1.30% on the day, supported by escalating tensions in the Middle East and indications that OPEC+ would probably decide to maintain production cuts next month.
On the other hand, the US Dollar held stable near multi-week tops and might turn out to be the only factor that helped limit any deeper losses amid persistent market concerns about US-China trade tensions.
With the Canadian markets closed in observance of Victoria Day, empty US economic docket seems unlikely to provide any meaningful impetus on Monday and leaves the pair at the mercy of USD/Oil price dynamics.
Technical levels to watch
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