USDCAD dives lower to the 1.34000 key level. It is encouraging to see the USDCAD pair fill the modest bullish fissure opening on Monday and retreat to the 1.34000 key level during the early trading hours of the European session. The positive movement can be attributed to a few factors, including an increase in crude oil prices, which has given some support for the commodity-linked Loonie and strong follow-through US Dollar buying interest.
The US Dollar Index, which tracks the greenback against the pair of currencies, has built on Friday’s solid recovery from a nine-month low and continues to gain momentum. This is due to various supportive elements, such as upbeat US jobs data, that could allow the Federal Reserve (Fed) to remain hawkish while raising rates at regular intervals. This further reinforces expectations of gradual Fed rate hikes this year, despite the recent slowdown in global economic activity across major economies like China and Europe.
US Treasury Bond Surge
It appears that the US Treasury bond yields have been pushed higher, which is a positive sign for the safe-haven greenback. This suggests that the USDCAD pair is likely to move in an upward direction, and any dips in the pair may be seen as opportunities for traders. Moreover, the risk-off environment is also seen as beneficial to the US dollar, further strengthening its position. Apart from the US bond yields and the broader market sentiment, traders will also be keeping an eye on oil prices, as they may offer some short-term trading opportunities.
Furthermore, as there are no major economic data releases from the US on Monday, the US dollar will be heavily reliant on these factors.
Overall, it appears that the US dollar is in a strong position, and any dips in the USD/CAD pair may be seen as good opportunities for traders. With US Treasury bond yields and the risk-off environment both favoring the US dollar, the pair’s path of least resistance is likely to be to the upside.
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