USD/CAD sticks to gains around mid-1.3300s, upside remains capped amid rising oil prices
- USD/CAD bounces off the weekly low touched earlier this Friday, though lacks follow-through.
- An uptick in the US bond yields revives the USD demand and offers some support to the major.
- A goodish pickup in oil prices underpins the Loonie and keeps a lid on any meaningful recovery.
The USD/CAD pair attracts some buying near the 1.3315-1.3320 region and stages a modest recovery from a fresh weekly low touched earlier this Friday. The pair sticks to its gains around the 1.3350 region through the early North American session and for now, seems to have snapped a three-day losing streak, albeit lacks bullish conviction.
A modest uptick in the US Treasury bond yields helps the US Dollar to gain some positive traction on the last day of the week, which, in turn, is seen offering some support to the USD/CAD pair. That said, growing acceptance that the Fed will slow the pace of its policy tightening is holding back the USD bulls from placing aggressive bets and capping the upside for the major.
It is worth recalling the November FOMC meeting minutes released on Wednesday revealed that officials were largely satisfied they could stop front-loading the rate increases. This, in turn, reaffirms bets for a relatively smaller 50 bps rate hike at the next FOMC policy meeting in December. Apart from this, a generally positive risk tone keeps a lid on the safe-haven greenback.
Furthermore, a goodish pickup in crude oil prices underpins the commodity-linked Loonie and further acts as a headwind for the USD/CAD pair amid relatively thin trading volumes. In the absence of any major market-moving economic release, either from the US or Canada, the fundamental backdrop warrants some caution before positioning for any further intraday positive move.
Technical levels to watch