USD/CAD clings to mild gains below 1.3500 as Oil price pares recent gains, US Dollar grinds higher

• USD/CAD grinds near intraday high while paring weekly losses.
• Oil price retreats from weekly top after rising the most in a fortnight.
• Risk dwindles amid US debt ceiling concerns but US Dollar remains firmer.
• Second-tier US/Canada data, risk catalysts eyed for clear directions.

USD/CAD seesaws around the intraday top of near 1.3470-75 heading into Thursday’s European session. In doing so, the Loonie pair buyers cheer recently easy Oil price and the US Dollar’s sturdy moves at the multi-day high amid a sluggish performance of the market.

That said, the WTI crude Oil prints mild losses near $72.60 as it consolidates the biggest daily gains in two weeks amid slightly offbeat market conditions. Adding strength to the bearish bias surrounding the black gold is the US Dollar’s strength and expectations of slower energy demand, mainly due to softer China data and recession woes in the West.

With this, the US Dollar Index (DXY) buyers keep the reins at the highest levels in seven weeks, mildly bid near 102.90 by the press time.

It’s worth noting that the recent increase in the bullish bets surrounding the Fed’s 0.25% rate hike in June, around 20% at the latest versus previous expectations favoring no such actions in 2023, favor the US Dollar bulls. Also supporting the greenback buyers are comments from US President Joe Biden and House Speaker Kevin McCarthy managed to convince the markets that they can unite to avoid the ‘catastrophic’ default, which in turn underpinned the market’s risk-on mood and propelled the US Dollar.

Amid these plays, S&P500 Futures print mild losses despite the upbeat Wall Street close whereas the US Treasury bond yields remain sidelined at the multi-day top. That said, the US 10-year and two-year Treasury bond yields rose to the highest levels since May 01 and April 24 while portraying a four-day uptrend near 3.57% and 4.16% respectively, easing to 3.56% and 4.14% by the press time.

Looking forward, the weekly US Jobless Claims and Philadelphia Fed Manufacturing Survey will join the Canadian Employment Insurance Beneficiaries Change and New Housing Price Index to entertain intraday traders of the USD/CAD pair. Above all, risk catalysts are key for clear directions.

Technical analysis

USD/CAD rebound remains elusive unless crossing a three-week-old descending resistance line, around 1.3540 by the press time. That said, multiple bounces off the 200-day Exponential Moving Average (EMA), around 1.3400 by the press time, join bullish MACD signals to keep the Loonie pair buyers hopeful.