USD / CAD faces rejection near the 1.3300 level and retreats below 1.3250

• USD / CAD is witnessing an aggressive short hedging move from levels below 1.3100.
• The US political uncertainty benefits the USD safe haven and supports the upward movement of the pair.
• A good rally in oil prices benefits the CAD and limits any further gains.

The pair USD / CAD has faced rejection near the 1.3300 level and has quickly retraced around 80 pips. from the daily highs hit at the start of the European session.

Having shown some resistance below the 1.3100 level, the pair has witnessed an aggressive short covering move on Wednesday and has been supported by a strong recovery in demand for the US dollar. The first results of the US elections have shown a closer race than expected by the White House.

Further, the possibility of the result being challenged in court has caused investors to turn to the USD and cover their positions. This, in turn, has been seen as a key factor that has led to a strong intraday rally around 200 pips and pushed the USD / CAD pair towards the 1.3300 level.

But nevertheless, A positive rally in crude oil prices has benefited the Canadian dollar, a currency linked to commodity prices, and caused an intraday decline for the USD / CAD pair. That said, the uncertain political situation in the US could continue to benefit the USD as a safe haven and attract some lower buying.

Market participants now await the US economic calendar, highlighting the release of the ADP report on private sector employment and ISM’s services PMI. However, the data is more likely to be overshadowed by political developments in the United States and not provide a significant boost.