USD/CAD slides towards 1.3400 on sluggish Oil, downbeat US Dollar ahead of BoC, Canada employment report

• USD/CAD takes offers to refresh intraday low, reverses week-start rebound.
• Sluggish sentiment, mixed Fed bias weigh on US Dollar.
• Oil price grinds near $72.00 as OPEC+, Saudi Arabia inspired run-up fades.
• Second-tier Canada statistics eyes ahead of BoC, Friday’s jobs data from Ottawa.

USD/CAD reverses the week-start rebound while refreshing intraday low near 1.3410 heading into Tuesday’s European session. In doing so, the Loonie pair fails to justify sluggish Oil price but cheers downbeat US Dollar and cautiously optimistic sentiment.

It’s worth noting that the US Dollar Index (DXY) extends the previous day’s downbeat performance while registering a 0.13% intraday loss near 103.85 by the press time. In doing so, the greenback’s gauge versus the six major currencies suffers from the downbeat data at home, as well as the mildly positive sentiment.

On Monday, most of the US PMIs for May, be it the ISM Services PMI or the final readings of S&P Global Composite PMI and Services PMI, as well as the US Factory Orders for the said month, marked downbeat figures and pushes back the hawkish Fed concerns. On the other hand, IMF’s Georgieva flagged concerns about more Fed rate hikes.

That said, recent headlines suggest the Sino-American talks are going smoothly but the Taiwan tension keeps poking the optimists.

It should be noted that the mixed concerns about Oil demand from China and the US prod the WTI crude oil buyers as they struggle to extend the three-day uptrend around $72.00 at the latest.

While portraying the mood, the US Treasury bond yields remain pressured as traders rush to the US bonds for risk safety.

Looking ahead, Canada’s Ivey Purchasing Managers Index for May could entertain intraday traders ahead of Wednesday’s Bank of Canada (BoC) Monetary Policy Meeting and Friday’s Canada employment report for May. While the recent easing in the hawkish Fed concerns keep USD/CAD bears hopeful, expectations of no change in BoC policy and likely weak Canada jobs report prods the Loonie pair sellers amid a sluggish day.

Technical analysis

A daily closing below the 200-day Exponential Moving Average (EMA), around 1.3420 by the press time, becomes necessary for the USD/CAD bears to aim for the key support line stretched from November 2022, close to 1.3330 at the latest.