- USD / CAD is unable to capitalize on its intraday move above the 1.3100 level, at weekly highs.
- A softer tone around oil prices weighs on the CAD and continues to support the initial rally.
- The emergence of some new selling around the USD is considered a key factor putting pressure on the pair.
The pair USD / CAD has rapidly retraced around 45-50 pips from weekly highs and now has fallen to the lower end of its daily trading range, around the 1.3060 region.
The pair has extended this week’s good bounce from multi-month lows and gained some traction during the first half of Thursday’s trading action. A softer tone around crude oil prices has weighed on demand for the loonie, a currency linked to commodity prices, which in turn has been considered a key factor behind the intraday rally in the USD / CAD pair.
But nevertheless, the emergence of some new selling around the US dollar at the start of the European session has limited any further gains for the USD / CAD pair, and rather has led to some new selling at higher levels. The continued rise in the number of COVID-19 cases in the United States has revived hopes for additional fiscal stimulus and has put some pressure on the USD.
The dollar has been further pressured by a sharp decline in US Treasury yields and has failed to attract any safe-haven cash flow amid a pullback in US equity futures. .UU. Meanwhile, USD / CAD has struggled to find acceptance above the round 1.3100 level, so the strong intraday pullback suggests that the recent bearish move may still be far from over.
Market participants are now awaiting the US economic calendar, featuring the latest consumer inflation figures and initial weekly jobless claims. The data, along with a scheduled speech from Fed Chairman Jerome Powell, will influence USD price dynamics and could generate some significant trading opportunities around the USD / CAD pair.
Credits: Forex Street
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