A dramatic fall in oil prices undermined the loonie and provided a strong boost to USD/CAD. Collapsing US bond yields, Fed rate cut speculations weighed on the USD and capped gains. Extremely overbought conditions might prompt some profit-taking amid bouncing oil prices. The USD/CAD pair trimmed a part of its early strong gains and retreated around 150 pips from to 34-months, albeit has just managed to hold above the 1.3600 mark. The pair opened with a bullish gap and subsequently surged to its highest level since early May 2017 – levels just above mid-1.3700s – on the first day of a new trading week amid crashing oil prices. Bulls opt to take some profits off the table In fact, oil prices nosedived more than 30% on Monday and recorded the biggest single-day rout since the first Gulf was in reaction to a possible full-blown price war between Saudi Arabia and Russia. Saudi Arabia slashed its official selling prices and made plans to ramp up crude output next month after Russia refrained from making a further steep output cut proposed by the OPEC+ alliance. The selloff in the oil markets weighed heavily on the commodity-linked currency – loonie – and was seen as one of the key factors behind the pair’s strong move during the early part of Monday’s trading action. This comes on the back of growing worries about the uncontained spread of the deadly coronavirus and rattled the global financial markets. The same was evident from a massive selloff in the equity markets. The global flight to safety, along with firming market expectations that the Fed will cut interest rates on March 18 aggravated the recent plunge in the US Treasury bond yields and undermined the US dollar. The bearish pressure surrounding the greenback remained unabated, which eventually kept a lid on any further gains, rather prompted some long-unwinding trade amid extremely over-stretched conditions. As the dust settled, oil prices managed to rebound from the early swing lows, which could possibly lead to a fresh wave of profit-taking amid absent relevant market-moving economic releases on Monday. Technical levels to watch FX Street FX Street FXStreet is the leading independent portal dedicated to the Foreign Exchange (Forex) market. It was launched in 2000 and the portal has always been proud of their unyielding commitment to provide objective and unbiased information, to enable their users to take better and more confident decisions. View All Post By FX Street FXStreet News share Read Next EUR/USD expected to test 1.1500 on a close above 1.1400 – UOB FX Street 3 years A dramatic fall in oil prices undermined the loonie and provided a strong boost to USD/CAD. Collapsing US bond yields, Fed rate cut speculations weighed on the USD and capped gains. Extremely overbought conditions might prompt some profit-taking amid bouncing oil prices. The USD/CAD pair trimmed a part of its early strong gains and retreated around 150 pips from to 34-months, albeit has just managed to hold above the 1.3600 mark. The pair opened with a bullish gap and subsequently surged to its highest level since early May 2017 – levels just above mid-1.3700s – on the first day of… Regulated Forex Brokers All Brokers Sponsored Brokers Broker Benefits Min Deposit Score Visit Broker 1 $100T&Cs Apply 0% Commission and No stamp DutyRegulated by US,UK & International StockCopy Successfull Traders 9.8 Visit Site FreeBets Reviews$100Your capital is at risk. 2 T&Cs Apply 9.8 Visit Site FreeBets Reviews$100Your capital is at risk. 3 Recommended Broker $100T&Cs Apply No deposit or withdrawal feesTrade major forex pairs such as EUR/USD with leverage up to 30:1 and tight spreads of 0.9 pips Low $100 minimum deposit to open a trading account 9 Visit Site FreeBets ReviewsYour capital is at risk. 4 T&Cs Apply Visit Site FreeBets ReviewsYour capital is at risk. 5 Recommended Broker $0T&Cs Apply Trade gold, silver, and platinum directly against major currenciesUp to 1:500 leverage for forex trading24/5 customer service by phone and email 9 Visit Site FreeBets ReviewsYour capital is at risk.