USD/CAD flirts with session lows, below 1.3100 ahead of US/Canadian jobs report
- USD/CAD met with some fresh supply on Friday and eroded a part of the overnight gains.
- The USD held steady and seemed unaffected by a goodish pickup in the US bond yields.
- Sliding crude oil prices did little to influence the loonie or lend any support to the major.
The USD/CAD pair weakened further below the 1.3100 mark during the early European session and refreshed daily lows in the last hour.
The pair met with some fresh supply on the last trading day of the week and eroded a part of the previous day's positive move to over one-week tops. The pullback lacked any obvious fundamental catalyst and could be solely attributed to some repositioning trade ahead of Friday's macro releases.
A goodish pickup in the US Treasury bond yields extended some support to the US dollar. The positive factor, to a larger extent, was offset by a solid rebound in the US equity futures, which was seen as a key factor that undermined the greenback's safe-haven demand and kept a lid on any strong gains.
Meanwhile, the intraday slide seemed rather unaffected by a weaker tone surrounding crude oil prices, which tend to dent demand for the commodity-linked currency – the loonie. Hence, any subsequent slide is more likely to attract some dip-buying as investors look forward to the US monthly jobs data.
The NFP report would shed some light on the quality of the US economic recovery and influence the USD price dynamics. This coupled with the Canadian monthly employment details should provide some meaningful impetus and assist investors to determine the USD/CAD pair's near-term trajectory.
Hence, it will be prudent to wait for some strong follow-through selling before traders again start positioning for the resumption of the prior well-established bearish trend. Meanwhile, bulls are likely to wait for a sustained move beyond the overnight swing high, around the 1.3160-65 region, before confirming that the pair might have bottomed out in the near-term.
Technical levels to watch