- USD/CAD struggles to defend the first daily gains in four around six-week low.
- Extended weekend in Canada restricts immediate moves even as US dollar, WTI pause recent declines.
- Mixed sentiment, cautious mood ahead of key jobs report, PMIs also portray inaction.
USD/CAD retreats to 1.2805 heading into Monday’s European session. Even so, the Loonie pair snaps a three-day downtrend while defending buyers around the lowest levels in six weeks.
That said, the quote’s recent pause in the further downside could be linked to the US dollar’s rebound from the intraday low. Also challenging the pair sellers is the recently weak prices of Canada’s main export item WTI crude oil, as well as the cautious mood ahead of this week’s key data from the US and Canada. It’s worth noting, however, that an August Civic Holiday in Canada appears to have restricted the quote’s latest moves.
That said, the US Dollar Index (DXY) picks up bids to 105.80 while paring intraday losses around the one-month low. On the other hand, WTI crude oil prices remain pressured near $95.70, down 0.85% on a day amid fears of more output increases from the Organization of the Petroleum Exporting Countries (OPEC) and allies including Russia, a group known as OPEC+. Fears of economic recession also weigh on the prices of WTI crude oil and underpin the USD/CAD rebound.
It’s worth noting that be the latest hawkish comments from Minneapolis Fed President Neil Kashkari and a firmer print of the Fed’s preferred inflation gauge also likely to have probed the USD/CAD bears.
However, downbeat PMIs from China and Beijing’s warning to the US, concerning US House Speaker Nancy Pelosi’s Asia visit, are also likely to have weighed on the market sentiment and favored the USD/CAD prices.
Looking forward, the US ISM Manufacturing PMI for July, expected at 52 versus 53 prior, could entertain intraday traders of the USD/CAD pair. However, major attention will be given to Friday’s monthly jobs report for the US and Canada.
Technical analysis
USD/CAD stays inside a two-week-old descending triangle bullish formation while recently fading the bounce off the 61.8% Fibonacci retracement (Fibo.) of June-July upside.
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