USD/CAD rebounds from seven-week lows toward 1.2835
- Loonie weakens as crude oil tumbles.
- US dollar remains under pressure as the US yields print fresh lows.
- USD/CAD rises back above 1.2820.
The USD/CAD rose more than 60 pips and printed a fresh daily high at 1.2830. Earlier on Monday bottomed at 1.2766, the lowest intraday level since June 10.
The move higher took place amid a weaker Canadian dollar across the board, as crude oil prices tumble. The WTI is falling by more than 5.50%, the barrel is hovering around $93.00.
The rebound in USD/CAD is being limited by a lower US dollar. The greenback remains under pressure, as market continues to rally and as Treasuries rise further. The Dow Jones is up by 0.20%, at the highest level since early June. The US 10-year yield broke below 2.60%, the lowest since April 7.
Economic data from the US came in mixed. The ISM Manufacturing PMI dropped to the lowest since 2020 at 52.8, better than the market consensus (52). Construction spending dropped unexpectedly in June 1.1%. Regarding data, the critical day of the week will be Friday with the official employment reports due in Canada and the US.
Bearish, but the rebounds offer hope to bulls
The short-term trend in USD/CAD point to the downside. Although the pair rebounded from an important support at 1.2775 (100-day Simple Moving Average), alleviating the negative momentum.
If the rebound continues, the dollar will face resistance between 1.2830 and 1.2850. Attention then would turn to 1.2900. The next key level is the 20-day Simple Moving Average at 1.2930. A daily close above should change the bias to bullish.
A decline back under 1.2800 would reinforce the bearish outlook. Support levels below are seen at 1.2766 (Aug 1 low) and 1.2730.
Technical levels