- USD/CAD failed to capitalize on the overnight bounce from near two-week lows.
- Positive oil prices underpinned the loonie and exerted some fresh bearish pressure.
- A modest pullback in the US bond yields further kept the USD bulls on the defensive.
The USD/CAD pair extended its steady intraday slide and refreshed daily lows, around mid-1.3200s during the early European session on Friday.
The pair failed to capitalize on the previous session’s goodish intraday recovery move from near two-week lows, rather met with some fresh supply on the last trading day of the week. The pair drifted into the negative territory for the third session in the previous four and was being weighed down by a combination of factors, including a subdued US dollar price action.
USD/CAD weighed down by positive oil prices
A modest pickup in crude oil prices underpinned demand for the commodity-linked currency – the loonie and turned out to be one of the key factors exerting some pressure on the major. Despite growing market concerns about the negative impact of the deadly coronavirus on the Chinese economy, the possibility of deeper supply cuts from major producers supported oil prices.
Meanwhile, the US dollar consolidated its recent bullish run to multi-month tops, around the 99.00 round-figure mark. However, a weaker tone surrounding the US Treasury bond yields held the USD bulls on the defensive, which eventually did little to lend any support or provide any meaningful impetus to the pair.
Moving ahead, market participants now look forward to the US economic docket, highlighting the release of monthly retail sales figures. This will be followed by the Michigan Consumer Sentiment Index, which might influence the USD price dynamics and produce some short-term trading opportunities later during the early North-American session.
Technical levels to watch