- USD/CAD continued gaining traction for the third consecutive session on Monday.
- Resurgent USD demand, weaker oil prices remained supportive of the positive move.
- Bulls took a brief pause near mid-1.4100s, awaiting fresh catalyst before the next leg up.
The USD/CAD pair now seems to have entered a bullish consolidation phase and was seen oscillating in a range below mid-1.4100s, or over one-week tops set earlier today.
A combination of supporting factors assisted the pair to build on last week’s strong recovery move from six-week lows, around mid-1.3800s and continue gaining traction for the third consecutive session on Monday.
The US dollar was back in demand on the back of deteriorating global risk sentiment amid a US-China spat over the origin of the coronavirus, which overshadowed the latest optimism over re-opening of the economies.
The already weaker sentiment deteriorated further the US President Donald Trump threatened to impose fresh tariffs on China in retaliation to its cover-up and mishandling of the coronavirus outbreak at the early stage.
This coupled with a fresh leg down in crude oil prices undermined demand for the commodity-linked currency – the loonie – and remained supportive of the pair’s bid tone through the early European session on Monday.
The latest development comes amid persistent worries about a global supply glut and slump in demand in the wake of coronavirus-induced lockdowns, which exerted some fresh downward pressure on oil prices on the first day of the week.
Bulls, however, took some breather near the 1.4150-55 region as the focus now shifts to this week’s important US macro data scheduled at the beginning of a new month, including the closely watched monthly jobs report (NFP).
In the meantime, the USD/oil price dynamics, along with development surrounding the coronavirus saga might contribute towards producing some meaningful trading opportunities in the absence of any major market-moving economic releases.
Technical levels to watch