The USD/CAD pair comes under some selling pressure on Friday and reverses a part of the previous day's positive move to the 1.3700 neighbourhood, or i
Hawkish Fed expectations and softer Oil prices limit losses ahead of Canadian jobs report.The USD/CAD pair
comes under some selling pressure on Friday and reverses a part of the previous day's positive move to the 1.3700 neighbourhood, or its highest level since late March. Spot prices, however, manage to rebound a few pips from the daily low and trade around the 1.3665-1.3670 area during the first half of the European session, down less than 0.15% for the day.
A modest US Dollar retracement slide from a six-month top, triggered by retreating US Treasury bond yields, turns out to be a key factor exerting some downward pressure on the USD/CAD pair. That said, expectations that the Federal Reserve will keep interest rates higher for longer should act as a tailwind for the US bond yields and the USD. Apart from this, a softer tone surrounding Crudeundermines the commodity-linked Loonie and contributes to limiting the downside for the major.
From a technical perspective, the intraday downtick stalls near the 1.3650 horizontal resistance breakpoint, now turned support. Any further decline is more likely to attract fresh buyers and remain limited near the 1.3600 round-figure mark. The latter should act as a key pivotal point, which if broken decisively should pave the way for some meaningful corrective decline. The USD/CAD pair might then accelerate the slide towards the next relevant support near the 1.3525 region en route to the 1.
On the flip side, bullish traders might now wait for a sustained strength beyond the 1.3700 mark before placing fresh bets. The subsequent move-up has the potential to lift the USD/CAD pair towards the 1.3730 resistance zone en route to the 1.3800 round figure. The upward trajectory could get extended further and push spot prices towards retesting the YTD top, around the 1.3860 region touched in March.
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