USD/CAD weakens back to 1.2900 neighborhood amid notable USD supply

   “¢   Trade war fears weigh on the USD and prompt some fresh selling.
   “¢   Resurgent US bond yields do little to revive the USD demand.
   “¢   Positive oil prices underpin Loonie and add to the selling pressure.

The USD/CAD pair came under some renewed selling pressure on Monday and is currently placed at the lower end of its daily trading range.

Returning trade war fears weighed on the US Dollar weakness on Monday, with the pair extending its rejection slide from the key 1.30 psychological mark, touched in the aftermath of Friday’s stronger-than-expected US monthly jobs report.

This coupled with a modest rebound in crude oil prices underpinned demand for the commodity-linked currency – Loonie and further collaborated to the pair’s offered tone through the early European session.

Even a goodish pickup in the US Treasury bond yields failed to revive the greenback demand and stall the pair’s downfall back closer to the 1.2900 handle, albeit might now help limit further downside at least for the time being.

In absence of any major market moving economic releases, the USD price dynamics might continue to act as an exclusive driver of the pair’s momentum on the first trading day of a new week.  

Technical levels to watch

Any subsequent weakness below the 1.2900 handle is likely to find support near the 1.2875-70 region, which if broken might turn the pair vulnerable to head back towards retesting 50-day SMA support near the 1.2815 region.

On the upside, any bullish move beyond the 1.2860 region might continue to confront fresh supply near the 1.30 handle, above which the pair is likely to retest the 1.3045-50 supply zone before eventually aiming to reclaim the 1.3100 handle.