- Retreating Oil prices undermined Loonie and helped gain some traction on Monday.
- A subdued USD demand failed to impress bulls or provide any meaningful impetus.
The USD/CAD pair edged higher during the early European session on Monday and built on the previous session’s late rebound from two-week lows.
The pair on Friday came under some selling pressure amid a modest US Dollar pullback following the release of mixed US macro data, albeit managed to find some support ahead of the 1.3200 handle in the wake of weaker Crude Oil prices. Against the backdrop of easing tensions in the Middle East, concerns over the global energy demand outlook weighed on Crude prices and made it difficult for the commodity-related Loonie to preserve its gains.
Weaker oil prices remain supportive
A follow-through slide in Oil prices, now falling back closer to the $55.00/barrel mark, helped the pair to gain some traction on the first day of a new week. However, a subdued USD price action, despite a goodish pickup in the US Treasury bond yields, failed to provide any meaningful impetus to the major.
The greenback struggled for a firm direction on Monday amid the latest twists in the US-China trade dispute, wherein reports on Friday indicated that the US Administration was looking to restrict capital flows into China and to limit Chinese companies from trading on the US exchanges. The US Treasury officials on Saturday denied any plans to do so “at this time,” but also did not rule them out.
Looking at the broader picture, the pair remains well within a broader trading range held over the past one week so. Hence, it will be prudent to wait for a strong follow-through buying before positioning for any further near-term appreciating move amid relatively thin US economic docket – featuring the only scheduled release of Chicago PMI later during the early North-American session.
Technical levels to watch
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