USD/CAD finds decent support ahead of 1.3100 mark
| • Positive US bond yields help ease USD bearish pressure on Monday.
• Softer oil prices weigh on Loonie and lend some additional support.
The USD/CAD pair managed to rebound around 20-25 pips from Asian session lows and is currently placed at the top end of its consolidative trading range.
Canadian macro releases - upbeat retail sales data and mostly in-line consumer inflation figures, prompted some aggressive selling on Friday and dragged the pair sharply lower from three-week tops. This coupled with a broad-based US Dollar weakness exerted some additional downward pressure and further collaborated to the pair's fall of nearly 175-pips from the vicinity of 1.3300 handle.
The USD remained on the defensive at the start of a new trading week and was being weighed down by the US President Donald Trump's comments. During an interview with CNBC, Trump said that he was prepared to put tariffs on all $505 billion in Chinese goods imported to the US and also criticized the Fed' monetary tightening.
However, a modest uptick around the US Treasury bond yields extended some support to the greenback. This along with a mildly softer tone around crude oil prices, which tends to undermine demand for the commodity-linked currency - Loonie helped ease the bearish pressure, at least for the time being.
Currently trading around the 1.3135-40 region, traders now look forward to the release of existing home sales data for some short-term trading impetus.
Technical levels to watch
Any subsequent up-move is likely to confront immediate resistance near the 1.3165 level, above which the pair could make an attempt towards reclaiming the 1.3200 handle. On the flip side, the 1.3115-10 region now seems to have emerged as an immediate support, which if broken might accelerate the fall further towards 50-day SMA support near the 1.3075-70 region.
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