USD/CAD: Range play intact below 1.3400 amid a rally in WTI
- USD/CAD consolidates the post-NFP gains below 1.3400.
- CAD bulls look to capitalize on the WTI rally.
- Dollar dynamics, US stimulus talks will remain of note.
USD/CAD extends its side trend into the European session, consolidating Friday’s to just shy of the 1.3400 level.
At the press time, the spot trades modestly flat at 1.3390, having found solid bids near the 1.3365 region earlier in the Asian session.
The latest leg up in the major can be attributed to the fresh buying interest seen in the US dollar across its main peers, as the sentiment continues to remain underpinned by the upbeat US Non-Farm Payrolls data. Payrolls for July increased by 1.8 million vs. 1.6 million expected.
However, the bulls struggle to extend the upside above the 1.3400, as the Canadian dollar continues to find support from the rally in WTI prices. The US oil jumped over 1% to regain $41.50 after Saudi Aramco’s CEO said that oil demand recovery is picking up amid easing lockdowns worldwide.
Looking ahead, amid an absence of significant US and Canadian macro data, the focus will remain on the risk trends and US dollar dynamics ahead of the US fiscal stimulus talks.
USD/CAD technical levels
To the upside, the spot needs to take out 1.3400 (round number), in order to test 20-DMA at 1.3413. On the flip side, 5-DMA at 1.3347 will be the immediate cushion. The next downside target is seen at 1.3300 (round figure).
USD/CAD additional levels