• USD/CAD extends the previous day’s rebound from weekly low ahead of the key US/Canada jobs report for July.
  • US dollar tracks yields to consolidate recent losses, snaps two-day downtrend.
  • Oil prices bounce off six-month low amid geopolitical concerns.

USD/CAD picks up bids to 1.2875 as buyers keep reins for the second consecutive day heading into Friday’s European session.

The Loonie pair’s latest gains could be linked to the US dollar’s rebound, as well as the market’s cautious optimism, ahead of the key US/Canada jobs report for July. In doing so, the quote also ignores the corrective pullback in prices of Canada’s main export item WTI crude oil from a six-month low.

That said, the US Dollar Index (DXY) snaps a two-day downtrend while printing mild gains around 106.00. The greenback gauge dropped during the last two days before tracing the yields to consolidate recent losses. It’s worth noting that the US 10-year Treasury yields stabilize around 2.069% after declining in the last two days. Even so, the US Treasury yields continued to portray the risk of recession as the difference between the 10-year and 2-year bond coupons remain the widest since 2000.

On the other hand, WTI crude oil prices rise 1.15% intraday while bouncing off the lowest levels since February, to $89.00 at the latest.

The recent gains of the US dollar, as well as the crude oil prices, could also be linked to the fears of fresh geopolitical challenges emanating from the Taiwan Strait as China reflects its dislike for US House Speaker Nancy Pelosi’s visit to Taipei. At the latest, US Secretary of State Antony Blinken recently told an East Asia meeting, per West Official, that China’s reaction to US House Speaker Nancy Pelosi’s Taiwan visit had been "flagrantly provocative".

Amid these plays, Wall Street closed mixed and the S&P 500 Futures print mild gains while taking rounds to the two-month high flashed the previous day, up 0.23% intraday around 4,162 by the press time.

Moving on, USD/CAD traders should be cautious as the US employment report is likely to flash comparatively weaker data, which in turn could defy the Fed hawks and weigh on the pair prices. However, a surprise increase in the headline Nonfarm Payrolls (NFP), expected 250K versus 372K prior, won’t hesitate to propel the greenback.

Also read: Nonfarm Payrolls Preview: High expectations set deal the dollar a blow, create buying opportunity

Technical analysis

Unless crossing the 21-DMA hurdle surrounding 1.2910, the USD/CAD buyers remain unconvinced.

Additional impotant levels

Overview
Today last price 1.2875
Today Daily Change 0.0010
Today Daily Change % 0.08%
Today daily open 1.2865
 
Trends
Daily SMA20 1.291
Daily SMA50 1.286
Daily SMA100 1.2782
Daily SMA200 1.2733
 
Levels
Previous Daily High 1.2876
Previous Daily Low 1.2818
Previous Weekly High 1.2947
Previous Weekly Low 1.2789
Previous Monthly High 1.3224
Previous Monthly Low 1.2789
Daily Fibonacci 38.2% 1.2854
Daily Fibonacci 61.8% 1.284
Daily Pivot Point S1 1.283
Daily Pivot Point S2 1.2795
Daily Pivot Point S3 1.2772
Daily Pivot Point R1 1.2888
Daily Pivot Point R2 1.2911
Daily Pivot Point R3 1.2946

 

 

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