USD/CAD edges lower on softer USD, lacks follow-through amid bearish Oil prices – Crypto News

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• USD/CAD trades with a mild negative bias and is pressured by a modest USD downtick.
• The uncertainty over the Fed’s rate-hike path should help limit any meaningful USD fall.
• Bearish Oil prices might continue to undermine the Loonie and lend support to the pair.

The USD/CAD pair ticks lower during the Asian session on Thursday and for now, seems to have snapped a three-day winning streak to a weekly high, around the 1.3815 region touched the previous day. Spot prices currently trade below the 1.3800 mark, though the fundamental backdrop warrants some caution for bearish traders and before positioning for any meaningful depreciating move.

Growing acceptance that the Federal Reserve (Fed) is nearing the end of its policy tightening campaign leads to a further decline in the US Treasury bond yields and keeps the US Dollar (USD) bulls on the defensive. This, in turn, is seen exerting pressure on the USD/CAD pair. That said, the recent comments by several Fed officials raised uncertainty on whether rates had reached their peak or there was a need to hike interest further to bring inflation back to the 2% target. Furthermore, the cautious market mood should help limit the downside for the safe-haven Greenback.

Apart from this, bearish Crude Oil prices might continue to undermine the commodity-linked Loonie and lend some support to the USD/CAD pair. Investors now seem less worried about the possibility of any supply disruptions from the Middle East in the wake of the Israel-Hamas conflict. This, along with easing concerns about tight global supplies and the worsening outlook for the global economy, which is expected to dent fuel demand, dragged the black liquid further below the 200-day Simple Moving Average (SMA), to a near four-month low on Wednesday.

The Bank of Canada (BoC) Governor Tiff Macklem, meanwhile, had said that the central bank may not have to raise its key overnight rate further if inflation cools in line with expectations. This, in turn, supports prospects for the emergence of some dip-buying around the USD/CAD pair. Hence, it will be prudent to wait for strong follow-through selling before confirming that the move-up witnessed since the beginning of this week has run out of steam.

Market participants now look to the US economic docket, featuring the release of the usual Weekly Initial Jobless Claims later during the early North American session. The focus, however, will remain on Fed Chair Jerome Powell’s speech, which, along with the US bond yields, will drive the USD demand and provide some impetus to the USD/CAD pair. Apart from this, Oil price dynamics might contribute to producing short-term trading opportunities.

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