• The prevailing bearish sentiment around oil prices continues to weigh on the Loonie.
• Declining US bond yields exert some pressure on the USD and capped further gains.
• Market participants now eye US/Canadian macro data for some fresh trading impetus.
The USD/CAD pair held on to its strong bid tone through the early European session, albeit seemed struggling to extend the momentum further beyond mid-1.3500s or multi-month lows.
After yesterday's modest pullback, the pair caught some fresh bids on the last trading day of the week and touched an intraday high level of 1.3548 - the highest since early Jan. The prevailing bearish pressure surrounding Crude Oil prices continued weighing on the commodity-linked currency - Loonie and turned out to be one of the key factors behind the pair's positive move for the fourth session in the previous five.
In fact, WTI Crude Oil fell around 1% on Friday and added to its recent heavy losses - marking the biggest monthly fall since November, amid the global economic growth concerns and growing fears about a global trade war. Oil prices fell below the $56.00/barrel mark - the lowest since March 8 after the US President Donald Trump ramped up trade tensions by slapping tariffs on Mexican goods.
Meanwhile, the global flight to safety triggered a fresh leg of a free fall in the US Treasury bond yields, which hindered the US Dollar's recent up-move to two-year tops and turned out to be the only factors failing to provide any additional boost to the major, rather capping gains.
Investors also seemed reluctant to place any aggressive bets and preferred to wait on the sidelines ahead of Friday's important macro releases. The US economic docket highlights the release of the core PCE price index, which the monthly Canadian GDP growth figures might influence the Canadian Dollar and further collaborate towards producing some meaningful trading opportunities on the last trading day of the week.
Technical levels to watch
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