USD/CAD finds some support near 1.3900 amid a modest USD uptick, weaker oil prices
- A combination of factors assisted USD/CAD to attract some dip-buying near 1.3900 mark.
- A pickup in the US bond yields helped revive the USD demand and extended some support.
- Weaker oil prices undermined the loonie and remained supportive of the attempted bounce.
The USD/CAD pair lacked any firm directional bias and remained confined in a narrow trading band, below mid-1.3900s through the early European session.
The pair once again some resilience near the 1.3900 round-figure mark and was being supported by a combination of factors, including a modest US dollar uptick and a weaker tone surrounding crude oil prices.
As investors looked past Friday's awful US NFP report, a goodish pickup in the US Treasury bond yields helped revive the USD demand and turned out to be one of the key factors lending some support to the USD/CAD pair.
The USD bulls seemed rather unaffected by speculations that the Fed might be forced to push interest rates below zero and the prevalent risk-on mood, amid the optimism over the easing of lockdown restrictions.
Meanwhile, concern over the economic fallout from the coronavirus pandemic overshadowed the recent supply cuts by major oil producers. This, in turn, weighed on oil prices and undermined the commodity-linked currency – the loonie.
It, however, remains to be seen if the pair is able to capitalize on the attempted recovery move or extends last week's sharp retracement slide from the 1.4175 region amid absent relevant market-moving economic releases.
From a technical perspective, bears are likely to wait for a sustained break through the 1.3900 mark before positioning for any further near-term depreciating move, possibly towards late-April swing lows near mid-1.3800s.
Technical levels to watch
Immediate resistance is pegged near the 1.3970 horizontal level, above which the pair is likely to aim back towards reclaiming the key 1.40 psychological mark. The momentum could further get extended towards the 1.4040 region en-route the next major barrier near the 1.4085-90 zone.
On the flip side, a sustained break below the 1.3900 mark might now be seen as a fresh trigger for bearish traders and set the stage for a slide towards important horizontal support near the 1.3850 region.