- The USD remained well supported by Powell’s upbeat comments on Friday.
- Pickup in Oil prices underpinned Loonie and seemed to exert some pressure.
The greenback remained on the defensive against its Canadian counterpart, with the USD/CAD pair struggling near five-week lows set on Friday.
A combination of factors exerted some heavy selling pressure around the major on the last trading day of the week and took along some short-term trading stops being placed near the 50-day SMA support – around the 1.3200 round figure mark.
The US Dollar weakened across the board in reaction to softer headline NFP print, showing that the US economy added 130K new jobs in August as compared to 158K expected and overshadowed upbeat wage growth data for the reported month.
On the other hand, Canadian employment details showed that the number of employed people rose sharply by 81.1K in August as against 15K expected and a fall of 24.2K in the previous month, which provided a goodish lift to the domestic currency.
Positive Oil prices underpinned Loonie
The pair tumbled over 75-pips and remained depressed through the early European session on Monday amid a strong pickup in Crude Oil prices, which tend to underpin demand for the commodity-linked currency – Loonie.
Oil prices remained well supported by the fact that Saudi Arabia – the world’s largest oil exporter – will continue to support output cuts by OPEC and other producers to prop up prices under new Energy Minister Prince Abdulaziz bin Salman.
As investors looked past the latest US monthly jobs report, Friday’s upbeat comments by the Fed Chair Jerome Powell helped the greenback to regain some support and seemed to be the only factor limiting any further downside, at least for now.
It will now be interesting to see if the pair continues to show some resilience or adds to last week’s steep decline, confirming a bearish breakdown, in absence of any major market-moving economic releases – either from the US or Canada.
Technical levels to watch
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