Ella 
In Asia on Monday, USD/CAD struggled to extend its strong intraday rebound of over 100 points last Friday, falling moderately to around mid-1.3500. A slight rise in crude oil prices triggered the decline, but a combination of factors should help limit losses.
Crude prices rebounded from their lowest levels since June 2023 on Friday as a potential hurricane was forecast to approach the northwestern U.S. Gulf Coast, which accounts for 60% of U.S. refining capacity . This in turn supports the commodity-linked Canadian dollar and puts some downward pressure on the USD/CAD pair. That said, the weak Canadian jobs report released on Friday raised hopes for further interest rate cuts from the Bank of Canada (BoC), which should limit gains in the Canadian dollar.
Meanwhile, U.S. employment data on Friday were mixed, providing evidence of a sharp deterioration in the labor market. This, coupled with reduced bets on a sharp rate cut by the Federal Reserve (Fed), has weakened investor appetite for risk assets and prompted some safe-haven flows into the U.S. dollar (USD). This could further disincentivize traders from placing aggressive bearish bets on USD/CAD, so it would be prudent to wait for strong follow-through selling in USD/CAD before setting up positions for further USD/CAD depreciation moves. .
Looking forward to the market outlook, neither the United States nor Canada will release any relevant market economic data on Monday, which makes the U.S. dollar affected by broader risk sentiment and U.S. bond yields. Beyond that, oil price swings should impact the Canadian dollar (CAD) and help generate short-term trading opportunities for USD/CAD.
