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USD/CAD holds below 1.40 as oil rebounds and Fed hike bets fade

Traders are also waiting for Friday US nonfarm payrolls and Canadian employment data to guide the pair’s next move.

Reported · Written up by our desk · Major Pairs

FXStreet reports that USD/CAD stayed under pressure in the Asian session, with traders watching for a break below the 1.4000 level before adding to bearish positions after the previous day’s pullback from a one-week top.

The Canadian dollar received support as crude oil rebounded from an over three-week low, with concerns about potential supply disruptions tied to missile attacks on Saudi oil tankers in the Red Sea by Iran-backed Houthis.

FXStreet also cited hopes for a potential US-Iran peace deal as a headwind for the US dollar, alongside softer expectations for additional Federal Reserve rate hikes. Still, traders appeared reluctant to place aggressive bets ahead of the Friday US nonfarm payrolls release and Canada’s employment details.

On the technical side, USD/CAD was capped below the 50-day simple moving average near 1.4070, suggesting rallies were being sold, while the outlook hinges on whether the pair can hold below that area or closes higher for a deeper corrective bounce.

Latest closeWTI crude $75.12 ▼0.9%

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