- USD / CAD consolidates recent losses to the lowest level since October 2018.
- The USD remains under pressure amid hopes for US fiscal stimulus and easing of the Fed’s monetary policy.
- Bullish oil prices support the CAD and limit any significant rise in the pair.
- Friday’s monthly jobs report from the United States and Canada will focus the invaders’ attention for a new trade boost.
The pair USD / CAD now appears to have entered a bearish consolidation phase and moves within a narrow range near the region of 1.2850.
The pair has struggled to register a significant recovery and has remained depressed near the lowest level since October 2018 during the first half of trading action on Friday. Oversold conditions on short-term charts have helped limit the slide, although a combination of factors has limited the Asian session’s rebound to the 1.2875 region.
The US dollar remains weak near a two-and-a-half-year low amid rising expectations for a new US coronavirus relief package and further monetary easing by the Fed. This, coupled with the latest optimism about the launch of a coronavirus vaccine, has further affected the safe-haven US dollar.
On the other hand, the prevailing bullish sentiment around crude oil prices has benefited demand for the loonie, a currency linked to commodity prices, and has helped limit the rise in the USD / CAD pair. In fact, WTI has recovered to new multi-month highs after major oil producers agreed to reduce production by 500,000 barrels per day starting in January 2021.
Despite the negative factors, the bears have refrained from opening new positions and have preferred to wait on the sidelines ahead of Friday’s release of U.S. and Canada monthly employment details. The Canadian jobs report is likely to be overshadowed by the US NFP, which will influence USD price dynamics and could generate further momentum to the USD / CAD pair.
USD / CAD technical levels