- USD / CAD remains under pressure near multi-year lows.
- USD weakness and upbeat BoC assessment weigh on the pair.
- Investors’ attention is on initial US jobless claims and Canadian employment data.
The USD/ CAD is consolidating the previous day’s decline around the 1.2620 / 25 region, at the start of the European session on Thursday, with bears waiting for the next downside momentum, after hitting two and a half year lows at 1.2604 following the Bank of Canada (BoC) monetary policy decision on Wednesday.
The Canadian central bank kept the key rate at 0.25% and was optimistic about the economic outlook, noting that the rollout of vaccines this year will help fuel a strong return to the economy.
Furthermore, the early moves of US President Joe Biden and the Likely Expectations of Greater Fiscal Stimulus Boost Risk Appetite Sentiment and weigh on the safe haven US dollar.
Meanwhile, stabilizing oil prices offers new enthusiasm for CAD bulls. However, the recovery in USD / CAD seems elusive despite the drop in WTI prices the day before. Black gold plummeted following an unexpected surge in US crude reserves, as published by the API.
USD / CAD will remain at the mercy of market sentiment and US dollar price action ahead of the release of US initial weekly jobless claims data and ADP Canada job change data.
USD / CAD technical levels
RSI oversold conditions also challenge further USD / CAD weakness and support the odds of a corrective pullback to the upside towards the round 1.2700 level. On the other hand, a sustained drop below the immediate support of 1.2620 will have to break the round 1.2600 level before challenging the April 2018 low of 1.2525, ”notes FXStreet analyst Anil Panchal.
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