- Sustained USD buying helps USD / CAD gain some positive traction on Thursday.
- The rally in crude oil prices benefits the CAD and limits any further gains in the pair.
The pair USD / CAD remains positive on the day, near the region of daily highs during Thursday’s European session, with bulls making another attempt to take advantage of the momentum above the 1.2800 level.
Following the price movement in both directions the day before, the pair managed to regain some positive traction on Thursday and has seen backed by sustained buying around the US dollar. However, the current uptrend in crude oil prices has benefited the Canadian dollar, a currency tied to commodity prices, and limited any uncontrolled movement in the USD / CAD pair.
The US bond market has reacted strongly Amid Signs of Progress on Additional US Stimulus Measures., which has pushed the benchmark 10-year government bond yield to nearly a 10-month high reached in January. This, coupled with the improvement in US economic data, has benefited the USD and offered some support to the USD / CAD pair.
ADP’s report released on Wednesday showed that the use of private sector in the United States created 174,000 new jobs in January. Additionally, the employment subcomponent of the US ISM service sector PMI report showed a significant increase from the previous month and raised expectations for Friday’s NFP nonfarm payroll report.
Meanwhile, expectations of massive spending by the US government have fueled optimism about a strong global economic recovery and demand for fuel. Oil prices rose to the highest level in more than a year and were supported by the fact that OPEC + extended its current oil production policy in a meeting on Wednesday.
This has been seen as the only factor that has limited the rise of the USD / CAD pair and makes it prudent to wait for some continuation buying before positioning for any further bullish movement. Market participants are now awaiting the release of the initial weekly US jobless claims data for further momentum at the start of the American session today.
USD / CAD technical levels
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