USD/CAD climbs to session tops, inching back closer to 1.3600 mark
- USD/CAD attracts some dip-buying ahead of the key 1.3500 psychological mark.
- A goodish pickup in the US bond yields extended some support to the greenback.
- A subdued oil price action did little to influence the commodity-linked loonie.
- Investors now eye the US retail sales data, Powell’s testimony for a fresh impetus.
The USD/CAD pair has managed to rebound around 65-70 pips from daily swing lows and was last seen trading near session tops, near the 1.3580-85 region.
The pair extended the previous day's retracement slide from two-week tops and witnessed some follow-through selling during the Asian session on Tuesday. Sustained US dollar selling was seen as one of the key factors exerting some pressure on the USD/CAD pair, albeit bulls found some support ahead of the 1.3500 psychological mark.
The global risk sentiment remained well supported by the Fed announcement on Monday that it will start purchasing a diversified range of investment-grade US corporate bonds to ensure credit market liquidity. The move helped offset renewed fears over a second wave of the coronavirus infections and boosted the global risk sentiment.
The upbeat market mood undermined the greenback's relative safe-haven status and was seen as one of the key factors behind the pair's early downtick. However, a strong intraday pickup in the US Treasury bond yields extended some support to the USD and helped limit any deeper losses for the USD/CAD pair, rather attracted some dip-buying.
Meanwhile, a subdued action in the oil markets did little to influence the commodity-linked currency – the loonie – or provide any meaningful impetus to the USD/CAD pair. Currently hovering around the very important 200-day SMA, around the 1.3575 region, the USD price dynamics is turning out to be an exclusive driver of the pair's momentum on Tuesday.
Moving ahead, market participants now look forward to the release of the US monthly retail sales figures for a fresh impetus. This along with the Fed Chair Jerome Powell's testimony before the Senate Banking Committee will drive sentiment around the USD and produce some meaningful trading opportunities later during the early North American session.
Technical levels to watch