USD/CAD spikes to session tops, closer to 1.3100 mark amid tumbling Oil prices

The USD/CAD pair picked up the pace in the last hour and spiked to fresh session top, well within the striking distance of one-week tops set on Wednes  |  18/07/2019 15:29

• A sudden drop in Oil prices weighed on Loonie and provided a strong lift in the last hour.
• A modest uptick in the US bond yields underpinned the USD and remained supportive.

The USD/CAD pair picked up the pace in the last hour and spiked to fresh session top, well within the striking distance of one-week tops set on Wednesday.

A sharp intraday turnaround in Crude Oil prices, now down nearly 2%, weighed heavily on the commodity-linked currency - Loonie and turned out to be one of the key factors behind the latest of a sharp spike of around 20-25 pips.

The latest news is that Russia's Roseft is back pumping oil at full capacity dragged Oil prices into the negative territory for the fourth consecutive session on Thursday and below the previous monthly lows support.

Meanwhile, the US Dollar held steady below the 97.00 handle - supported by an intraday uptick in the US Treasury bond yields and Thursday's upbeat Philly Fed manufacturing index, albeit did little to influence the price-action.

It, however, remains to be seen if the pair is able to capitalize on the positive momentum or continues with its struggle to make it through the 1.3100 handle amid rising odds of an aggressive policy easing by the Fed.

Hence, it would be prudent to wait for a strong follow-through buying interest before confirming that the pair might have bottomed out in the near-term and positioning for any further recovery towards the 1.3145-50 supply zone.

Technical levels to watch