- Remains well supported despite a follow-through USD pullback from two-year tops.
- A goodish rebound in Oil prices underpinned Loonie and seemed to cap further gains.
- All eyes remain glued to Friday’s important release of the US monthly jobs report.
The USD/CAD pair traded with a positive bias for the third consecutive session on Friday and remained well within the striking distance of six-week tops set in the previous session.
Despite some aggressive US Dollar long-unwinding trade on Thursday - led by a free-fall in the US Treasury bond yields, an intraday slump of over 7% in Crude Oil prices undermine demand for the commodity-linked currency - Loonie and helped the pair to build on the previous session's solid rebound from the 1.3100 neighbourhood - touched in reaction to upbeat Canadian monthly GDP growth figures.
With investors looking past Wednesday's hawkish cut by the Fed, the US President Donald Trump's overnight announcement to impose an additional 10% tariff on the remaining $300 billion worth of Chinese imports from Sept. 1 rattled global financial markets and provided a strong boost to traditional safe-haven assets - including the US government bonds.
The pair held on to its modest gains through the early European session on Friday, comfortably above the 1.3200 round figure mark, albeit a combination of negative force - a follow-through greenback pullback from two year tops and a goodish pickup in Oil prices, turned out to be key factors that kept a lid on any strong follow-through up-move for the major.
Investors also seemed reluctant to place any aggressive bets and preferred to wait on the sidelines ahead of the important release of the closely watched US monthly jobs report - popularly known as NFP. This coupled with Canadian trade balance data - though is likely to be overshadowed by the post-NFP volatility, might further collaborate towards producing some short-term trading opportunities.
Technical levels to watch
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