- USD/CAD eases from intraday top, stays pressured around monthly low.
- Sour sentiment, firmer Treasury yields fail to probe bears amid strong oil prices.
- September’s jobs report from US, Canada will be the key catalysts to watch for fresh impulse.
USD/CAD trades mixed near 1.2550, bouncing off monthly bottom ahead of Friday’s European session.
The loonie pair struggles to justify the mixed factors ahead of the key jobs report for September from the US and Canada. That said, the quote dropped the previous day as strong oil prices joined the risk-on mood to weigh on the US dollar.
However, softer US Jobless Claims and downbeat comments from the Bank of Canada (BOC) Governor Tiff Macklem probed the USD/CAD bears. The moves failed as China’s return couldn’t allow the sentiment to stay positive despite the US Congress agreement on debt filibuster until December 2021.
The reason for the oil price run-up could be linked to the hopes of fresh demand from the customers who previously used gas. In this regard, Reuters said, “Oil prices rose on Friday, tracking towards a 4.5% gain for the week on signs some industries have begun switching fuel from high-priced gas to oil and on doubts the U.S. government would release oil from its strategic reserves for now.”
It should be noted that the People’s Bank of China’s (PBOC) readiness for further easing and upbeat prints of China Caixin Services PMI could also be linked to the oil price run-up.
That being said, the cautious mood may restrict USD/CAD moves even as the oil prices stay on the front foot unless the employment data from the US and Canada get published.
As the Fed tapering concerns are hotter than the Bank of Canada (BOC) chatters, coupled with grim comments from BOC’s Macklem, firmer US jobs report can provide the much-needed bounce to the USD/CAD prices.
Read: Canadian Jobs Preview: Three reasons why this publication provides a straightforward trading opportunity
Technical analysis
A clear downside break of a two-month-old support line, now resistance around 1.2665, directs USD/CAD prices toward the previous month’s low near 1.2490.