USD/CAD jumps to session tops, bulls eyeing a move beyond 1.3700 mark
- USD/CAD reversed an early dip to 1.3650-45 region amid a goodish intraday USD rebound.
- A modest pickup in crude oil prices underpinned the loonie and capped gains for the pair.
The USD/CAD pair refreshed daily tops during the early North American session, with bulls now eyeing a sustained move beyond the 1.3700 round-figure mark.
The pair managed to reverse an early dip to the 1.3650-45 region and has now moved back into the positive territory. After spending a major part of Monday's trading session in the red, the US dollar staged a goodish intraday bounce and was seen as one of the key factors behind the USD/CAD pair's uptick of around 50 pips.
Investors remain concerned a surge in the number of coronavirus cases could trigger renewed lockdown measures. This, in turn, dampened prospects for a sharp V-shaped global economic recovery and continued weighing on investors' sentiment. The prevalent cautious mood extended some support to the greenback's relative safe-haven status.
The USD got an additional boost following the release of stronger-than-expected Pending Home Sales data, which surpassed even the most optimistic estimates and recorded a strong growth of 44.3% MoM in May. However, a positive turnaround in oil prices underpinned the commodity-linked currency – the loonie – and capped the upside for the USD/CAD pair.
Hence, it will be prudent to wait for some follow-through buying beyond Friday's swing high, around the 1.3715 region, before traders start positioning for any further near-term appreciating move. Above the mentioned barrier, the USD/CAD pair seems all set to climb further beyond mid-1.3700s, towards reclaiming the 1.3800 round-figure mark.
Technical levels to watch