USD/CAD Sticks To Gains On Stronger USD, Remains Below Mid-1.3400s Amid Bullish Oil Prices

The USD/CAD pair attracts some buying near the 200-day Exponential Moving Average (EMA) on Monday and sticks to its modest intraday gains through the early part of the European session. The pair currently trades around the 1.3430-1.3435 region, up nearly 0.10% for the day, and for now, seems to have snapped a three-day losing streak to the 1.3400 mark, or a roughly three-week low touched on Friday.

The US Dollar (USD) gains some follow-through traction for the second successive day and is a crucial factor acting as a tailwind for the USD/CAD pair. Despite the mixed US monthly employment details, the markets area still pricing in another 25 bps lift-off by the Federal Reserve (Fed) later this month. This supports a further rise in the US Treasury bond yields and pushes the Greenback higher on the first day of a new week. The prevalent risk-on mood might hold traders from placing aggressive bullish bets around the safe-haven buck.

The markets continue to cheer the optimism over the passage of legislation to lift the government’s $31.4 trillion debt ceiling to avert an unprecedented American default. A private-sector survey showed on Monday that China’s services activity picked up in May and boosted investors’ confidence, evident from a generally positive tone around the equity markets. This, along with an intraday rally in Crude Oil prices, which tends to underpin the commodity-linked Loonie, further capped any meaningful upside for the USD/CAD pair.

Oil prices opened with a bullish gap on Monday in response to an OPEC+ agreement over the weekend to extend at least 3.66 million bpd of cuts until end-2024 from end-2023. In addition, Saudi Arabia pledged to cut its production by about 1 million bpd in July to 9 million bpd and lend additional support to the black liquid. This, in turn, makes it prudent to wait for a strong follow-through buying around the USD/CAD pair before positioning for any further appreciating move ahead of the release of the US ISM Services PMI later during the early North American session.

Leave a Reply

Important Link

Fund Your Deriv Account
Withdraw Funds to Your Local Currency
VIP Trading Signals
Learn To Trade

Contact Us

Follow Us


Forex, Crypto, Options, and Binary Options have both large potential rewards and large potential risks. Therefore, before investing or trading any of the assets, ensure you are aware of and willing to accept the accompanying risks. Do not trade money you cannot afford to lose.

All Rights Reserved. None of the content of this website can be published elsewhere by any means without the prior consent of the owner(s). Please, check our terms & conditions and privacy policy before continuing to use this website.

This website and its owner(s) are not in any way liable for any incurred loss, whether caused by the information provided on this website or otherwise. The use of this website, including the content and information provided, is the user’s sole liability.