- USD/CAD gains traction for the second straight day and is supported by a combination of factors.
- Sliding Crude Oil prices undermines the Loonie and acts as a tailwind amid a modest USD strength.
- Traders now look forward to the closely-watched US monthly jobs data (NFP) for a fresh impetus.
The USD/CAD pair gains positive traction for the second successive day on Friday and looks to build on the overnight recovery move from the 1.3280 region, or its lowest level since November 16. Spot prices stick to modest intraday gains, around the 1.3345-1.3350 area through the early European session and draw support from a combination of factors.
Crude Oil prices prolong the recent rejection slide from the 100-day SMA hurdle and drop to a nearly four-week low on the last day of the week. The uncertainty over a strong economic recovery in China weighs on the outlook for fuel demand and exerts pressure on the black liquid. This, in turn, is seen undermining the commodity-linked Loonie, which, along with a modest US Dollar strength, lends support to the USD/CAD pair.
The US Weekly Initial Jobless Claims released on Thursday pointed to the underlying strength in the labor market and raises the possibility of strong Nonfarm Payrolls (NFP) data. Furthermore, the upbeat US macro data forces investors to re-evaluate their expectations for future rate hikes by the Fed. Apart from this, the prevalent cautious mood lends support to the safe-haven buck and remains supportive of the USD/CAD pair's uptick.
The global flight to safety, meanwhile, exerts some downward pressure on the US Treasury bond yields, which, in turn, acts as a headwind for the USD. Traders also refrain from placing aggressive bets and prefer to wait on the sidelines ahead of the release of the closely-watched US monthly jobs report which may be a deciding factor for the trend, which is due later during the early North American session. This, along with Oil price dynamics should provide a fresh impetus to the USD/CAD pair.
Technical levels to watch
Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers. The author will not be held responsible for information that is found at the end of links posted on this page.
If not otherwise explicitly mentioned in the body of the article, at the time of writing, the author has no position in any stock mentioned in this article and no business relationship with any company mentioned. The author has not received compensation for writing this article, other than from FXStreet.
FXStreet and the author do not provide personalized recommendations. The author makes no representations as to the accuracy, completeness, or suitability of this information. FXStreet and the author will not be liable for any errors, omissions or any losses, injuries or damages arising from this information and its display or use. Errors and omissions excepted.
The author and FXStreet are not registered investment advisors and nothing in this article is intended to be investment advice.
Recommended content
Editors’ Picks
EUR/USD clings to gains above 1.0750 after US data
EUR/USD manages to hold in positive territory above 1.0750 despite retreating from the fresh multi-week high it set above 1.0800 earlier in the day. The US Dollar struggles to find demand following the weaker-than-expected NFP data.
GBP/USD declines below 1.2550 following NFP-inspired upsurge
GBP/USD struggles to preserve its bullish momentum and trades below 1.2550 in the American session. Earlier in the day, the disappointing April jobs report from the US triggered a USD selloff and allowed the pair to reach multi-week highs above 1.2600.
Gold struggles to hold above $2,300 despite falling US yields
Gold stays on the back foot below $2,300 in the American session on Friday. The benchmark 10-year US Treasury bond yield stays in negative territory below 4.6% after weak US data but the improving risk mood doesn't allow XAU/USD to gain traction.
Bitcoin Weekly Forecast: Should you buy BTC here? Premium
Bitcoin (BTC) price shows signs of a potential reversal but lacks confirmation, which has divided the investor community into two – those who are buying the dips and those who are expecting a further correction.
Week ahead – BoE and RBA decisions headline a calm week
Bank of England meets on Thursday, unlikely to signal rate cuts. Reserve Bank of Australia could maintain a higher-for-longer stance. Elsewhere, Bank of Japan releases summary of opinions.