USDCAD SIGNAL 03-02-2023 : USDCAD climbs to mid-1.3300s amid sliding oil prices, modest USD uptick ahead of NFP.


USDCAD SIGNAL 03-02-2023 : USDCAD climbs to mid-1.3300s amid sliding oil prices, modest USD uptick ahead of NFP.

  • USD/CAD gains traction for the second straight day and is supported by a combination of factors.
  • Sliding crude oil prices undermines the Loonie and acts as a tailwind amid a modest USD strength.
  • Traders now look forward to the closely-watched US monthly jobs data (NFP) for a fresh impetus.

USDCAD SIGNAL : The USDCAD pair gains positive traction for the second successive day on Friday and looks to build on the overnight recovery move from the 1.3280 region, or its lowest level since November 16. Spot prices stick to modest intraday gains, around the 1.3345-1.3350 area through the early European session and draw support from a combination of factors.

Crude oil prices prolong the recent rejection slide from the 100-day SMA hurdle and drop to a nearly four-week low on the last day of the week. The uncertainty over a strong economic recovery in China weighs on the outlook for fuel demand and exerts pressure on the black liquid. This, in turn, is seen undermining the commodity-linked Loonie, which, along with a modest US Dollar strength, lends support to the USD/CAD pair.

USDCAD SIGNAL : The US Weekly Initial Jobless Claims released on Thursday pointed to the underlying strength in the labor market and raises the possibility of strong Nonfarm Payrolls (NFP) data. Furthermore, the upbeat US macro data forces investors to re-evaluate their expectations for future rate hikes by the Fed. Apart from this, the prevalent cautious mood lends support to the safe-haven buck and remains supportive of the USD/CAD pair’s uptick.

The global flight to safety, meanwhile, exerts some downward pressure on the US Treasury bond yields, which, in turn, acts as a headwind for the USD. Traders also refrain from placing aggressive bets and prefer to wait on the sidelines ahead of the release of the closely-watched US monthly jobs report, due later during the early North American session. This, along with oil price dynamics should provide a fresh impetus to the USD/CAD pair.

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