- USD/CAD pair failed to capitalize on Friday’s goodish intraday positive move.
- A pickup in oil prices underpinned the loonie and capped any meaningful upside.
- The prevailing bullish sentiment around the USD seemed to help limit the downside.
The USD/CAD pair remained on the defensive through the early European session on Monday, albeit held well within the previous session's broader trading range.
The pair failed to capitalize on Friday's intraday positive move and once again failed near the 1.3070-75 supply zone amid a goodish pickup in crude oil prices, which tend to underpin demand for the commodity-linked currency – the loonie.
Traders preferred to stay on the sidelines
Oil prices climbed over 1% on the first day of a new trading week amid concerns over output and exports from key OPEC producers. Iraq temporarily stopped output at an oil field on Sunday while political unrest has reemerged in Libya.
Supply from the second site in Iraq is at risk as widespread unrest escalates in OPEC’s second-biggest producer. In Libya, National Oil Corp. declared force majeure after Commander Khalifa Haftar blocked exports at ports under his control.
On the other hand, the US dollar remained well supported by expectations that the US economy will continue to expand and reduced odds of any further interest rate cuts by the Fed, which eventually helped limit the downside, at least for now.
Moreover, investors also seemed reluctant to place any aggressive bets on the back of a holiday in the US and might prefer to stay on the sidelines ahead of the key event risk – the latest BoC monetary policy update on Wednesday.
The fundamental set-up points to an extension of the pair's range-bound price action, making it prudent to wait for a sustained move in either direction before traders start positioning for the near-term trajectory.
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 stays below 1.0700 ahead of US data
EUR/USD stays in a consolidation phase slightly below 1.0700 in the European session on Wednesday. Upbeat IFO sentiment data from Germany helps the Euro hold its ground as market focus shifts to US Durable Goods Orders data.
USD/JPY refreshes 34-year high, attacks 155.00 as intervention risks loom
USD/JPY is renewing a multi-decade high, closing in on 155.00. Traders turn cautious on heightened risks of Japan's FX intervention. Broad US Dollar rebound aids the upside in the major. US Durable Goods data are next on tap.
Gold manages to hold above $2,300
Gold struggles to stage a rebound following Monday's sharp decline but manages to hold above $2,300. The benchmark 10-year US Treasury bond yield stays in the green above 4.6% ahead of US data, not allowing XAU/USD to gain traction.
Worldcoin looks set for comeback despite Nvidia’s 22% crash Premium
Worldcoin price is in a better position than last week's and shows signs of a potential comeback. This development occurs amid the sharp decline in the valuation of the popular GPU manufacturer Nvidia.
Three fundamentals for the week: US GDP, BoJ and the Fed's favorite inflation gauge stand out Premium
While it is hard to predict when geopolitical news erupts, the level of tension is lower – allowing for key data to have its say. This week's US figures are set to shape the Federal Reserve's decision next week – and the Bank of Japan may struggle to halt the Yen's deterioration.