- USD/CAD regained some positive traction on the first day of a new trading week.
- Sliding oil prices undermined the loonie and remained supportive of the uptick.
- A modest USD profit-taking might keep a lid on any runaway rally, at least for now.
The USD/CAD pair was placed near daily tops during the early European session, with bulls making a fresh attempt to build on the momentum beyond the 1.3400 mark.
The pair caught some fresh bids on the first day of a new week and has now moved well within the striking distance of multi-week tops set on Friday. The uptick marked the second consecutive day of a positive move and was sponsored by sliding oil prices, which tend to undermine demand for the commodity-linked currency – the loonie.
Concerns over the ever-increasing coronavirus cases largely offset hopes for a recovery in the fuel demand and weighed on oil prices. The supporting factor, to some extent, was negated by a modest US dollar pullback from two-month tops, which, in turn, might keep a lid on any runaway rally for the USD/CAD pair, at least for the time being.
Investors remain worried that the lack of any additional fiscal stimulus could halt the current US economic recovery. Adding to this, the political uncertainty in the run-up to the US Presidential election in November prompted traders to lighten their USD bullish bets ahead of the first presidential debate on Tuesday.
There isn't any major market-moving economic data due for release on Monday, either from the US or Canada. Hence, it will be prudent to wait for a sustained move beyond the 1.3420 supply zone before positioning for any further appreciating move. A sustained move above might assist the USD/CAD pair to aim back to reclaim the key 1.3500 psychological mark.
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 holds above 1.0700 ahead of key US data
EUR/USD trades in a tight range above 1.0700 in the early European session on Friday. The US Dollar struggles to gather strength ahead of key PCE Price Index data, the Fed's preferred gauge of inflation, and helps the pair hold its ground.
USD/JPY stays above 156.00 after BoJ Governor Ueda's comments
USD/JPY holds above 156.00 after surging above this level with the initial reaction to the Bank of Japan's decision to leave the policy settings unchanged. BoJ Governor said weak Yen was not impacting prices but added that they will watch FX developments closely.
Gold price oscillates in a range as the focus remains glued to the US PCE Price Index
Gold price struggles to attract any meaningful buyers amid the emergence of fresh USD buying. Bets that the Fed will keep rates higher for longer amid sticky inflation help revive the USD demand.
Sei Price Prediction: SEI is in the zone of interest after a 10% leap
Sei price has been in recovery mode for almost ten days now, following a fall of almost 65% beginning in mid-March. While the SEI bulls continue to show strength, the uptrend could prove premature as massive bearish sentiment hovers above the altcoin’s price.
US core PCE inflation set to signal firm price pressures as markets delay Federal Reserve rate cut bets
The core PCE Price Index, which excludes volatile food and energy prices, is seen as the more influential measure of inflation in terms of Fed positioning. The index is forecast to rise 0.3% on a monthly basis in March, matching February’s increase.