TODAY USDCAD SIGNAL : USDCAD gained some positive traction on Monday, albeit struggled to capitalize on the move.

• The risk-on impulse dented demand for the safe-haven USD and capped the upside for the pair.
• Weaker oil prices undermined the loonie and extended support amid hawkish Fed expectations.

The USDCAD pair seesawed between tepid gains/minor losses through the first half of the European session and was last seen trading in the neutral territory, around mid-1.2700s.

TODAY USDCAD SIGNAL : The pair attracted some buying during the early part of the trading on Monday, though the uptick lacked bullish conviction and ran out of steam ahead of the 1.2800 round-figure mark. A generally positive tone around the equity markets failed to assist the safe-haven US dollar to preserve its early gains, instead prompted some intraday selling at higher levels. This, in turn, was seen as a key factor that acted as a headwind for the USD/CAD pair.

Investors turned optimism after Russia and Ukraine gave their most upbeat assessments after weekend negotiations. In fact, Ukrainian negotiator Mykhailo Podolyak said that Russia is beginning to talk constructively and we will achieve some results in a matter of days. Moreover, a Russian delegate to the talks, Leonid Slutsky noted that they had made significant progress and the delegations could soon reach draft agreements.

The incoming headlines boosted investors’ sentiment and dented demand for traditional safe-haven assets, including the greenback. The negative factors, to a larger extent, was offset by a fresh leg down in crude oil prices, which undermined the commodity-linked loonie. Apart from this, elevated US Treasury bond yields should limit any meaningful USD decline and lend some support to the USD/CAD pair, warranting some caution for bearish traders.

TODAY USDCAD SIGNAL : The recent monster gains in commodity prices following Russia’s invasion of Ukraine have been fueling concerns about a major inflationary shock. This, in turn, reinforced market bets for an imminent start of the policy tightening by the Fed and continued pushing the US bond yields higher. Hence, the market focus will remain glued to the outcome of a two-day FOMC policy meeting, which will play a key role in determining the near-term trajectory for the greenback.

In the meantime, fresh developments surrounding the Russia-Ukraine saga will influence the broader market risk sentiment, which, along with the US bond yields, will drive the USD demand. Apart from this, traders will take cues from oil price dynamics for some short-term opportunities around the USDCAD pair amid absent relevant market-moving economic releases.

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