- USD/CAD failed to capitalize on Thursday’s early uptick to levels beyond the 1.3600 mark.
- The upbeat market mood, sliding US bond yields undermined the USD and capped gains.
- Bullish crude oil prices benefitted the loonie and prompted some selling around the pair.
- The downside seems limited as the focus remains on the closely-watched US NFP report.
The USD/CAD pair quickly retreated around 25-30 pips from session tops and dropped to the lower end of its daily range, around the 1.3585-80 region.
A combination of factors failed to assist the pair to capitalize on the Asian session uptick to levels beyond the 1.3600 round-figure mark, rather prompted some selling. The USD/CAD pair, for now, seems to have stalled its modest recovery attempt from one-week lows set on Wednesday.
The US dollar remained depressed through the early half of Thursday's trading action amid the latest optimism over yet another positive results from the early-stage human trial for a COVID-19 vaccine. This coupled with sliding US Treasury bond yields further undermined the greenback.
This comes on the back of positive data from the US and Europe, which revived hopes of a sharp V-shaped global economic recovery. This, in turn, remained supportive of the upbeat market mood, which further dented demand for the safe-haven USD and capped the upside for the USD/CAD pair.
On the other hand, the commodity-linked currency – the loonie – benefitted from the bullish sentiment surrounding crude oil prices. A sharp drop in the US crude inventories temporarily eased concerns about renewed lockdown measures, which might hinder a recovery in fuel demand.
The USD/CAD pair’s inability to gain any meaningful traction suggests that the near-term bearish bias is still far from being over. However, investors are likely to refrain from placing any aggressive bets for any further downfall, rather prefer to wait for Thursday’s release of the US monthly jobs data.
The closely watched NFP report is expected to show that the US economy created 3 million jobs in June and the unemployment rate is anticipated to have edged lower to 12.3% from 13.3% previous. The data will influence the USD price dynamics and produce some meaningful trading opportunities.
Technical levels to watch
Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers. The author will not be held responsible for information that is found at the end of links posted on this page.
If not otherwise explicitly mentioned in the body of the article, at the time of writing, the author has no position in any stock mentioned in this article and no business relationship with any company mentioned. The author has not received compensation for writing this article, other than from FXStreet.
FXStreet and the author do not provide personalized recommendations. The author makes no representations as to the accuracy, completeness, or suitability of this information. FXStreet and the author will not be liable for any errors, omissions or any losses, injuries or damages arising from this information and its display or use. Errors and omissions excepted.
The author and FXStreet are not registered investment advisors and nothing in this article is intended to be investment advice.
Recommended content
Editors’ Picks
EUR/USD alternates gains with losses near 1.0720 post-US PCE
The bullish tone in the Greenback motivates EUR/USD to maintain its daily range in the low 1.070s in the wake of firmer-than-estimated US inflation data measured by the PCE.
GBP/USD clings to gains just above 1.2500 on US PCE
GBP/USD keeps its uptrend unchanged and navigates the area beyond 1.2500 the figure amidst slight gains in the US Dollar following the release of US inflation tracked by the PCE.
Gold keeps its daily gains near $2,350 following US inflation
Gold prices maintain their constructive bias around $2,350 after US inflation data gauged by the PCE surpassed consensus in March and US yields trade with slight losses following recent peaks.
Bitcoin Weekly Forecast: BTC’s next breakout could propel it to $80,000 Premium
Bitcoin’s recent price consolidation could be nearing its end as technical indicators and on-chain metrics suggest a potential upward breakout. However, this move would not be straightforward and could punish impatient investors.
Week ahead – Hawkish risk as Fed and NFP on tap, Eurozone data eyed too
Fed meets on Wednesday as US inflation stays elevated. Will Friday’s jobs report bring relief or more angst for the markets? Eurozone flash GDP and CPI numbers in focus for the Euro.