USD/CAD eases from near 4-week tops

29 March, 2019

The USD fails to benefit from a strong recovery in the US bond yields. Resurgent oil prices underpin Loonie and prompt some profit-taking. Traders now eye Canadian monthly GDP/US data for a fresh impetus.

The USD/CAD pair traded with a mild negative bias through the early European session and is currently placed at session lows, around the 1.3425-20 region.

The pair failed to capitalize on its positive move witnessed over the past two trading sessions and struggled to make it through the 1.3450 supply zone, with a combination of factors prompting some profit-taking on the last trading day of the week. 

Despite a strong follow-through recovery in the US Treasury bond yields, the US Dollar consolidated the overnight goodish up-move to near three-week tops and was seen as one of the key factors keeping a lid on any follow-through up-move for the major.

Meanwhile, traders shrugged off the US President Donald Trump’s tweet about high oil prices on Thursday and a fresh leg of a positive move in crude oil prices further underpinned the commodity-linked currency and added to the pair's offered tone. 

The downside, however, remained limited as market participants now look forward to the release of monthly Canadian GDP print, which coupled with the Fed's preferred inflation gauge - core PCE Price Index might produce some meaningful trading opportunities.

Any further pull-back now seems to find some support near the 1.3400 handle, below which the pair is likely to accelerate the slide towards weekly lows, around the 1.3375-70 region, before eventually dropping to test the 1.3340-35 support area.

On the flip side, the 1.3440-50 region might continue to act as an immediate strong hurdle, which if cleared decisively would set the stage for a further appreciating move and assist the pair to aim towards reclaiming the key 1.3500 psychological mark.

Source   Presented by HYCM
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