- USDCAD gains ground for the second day in a row and is supported by a combination of factors.
- Weakening oil prices are weighing on the CAD and acting as a tailwind for the pair amid a rebound in dollar demand.
- Traders now await the US macroeconomic releases and Fed statements for further impetus.
The pair USDCAD take advantage of the previous day’s nice bounce from the support of the 100-day SMA and rise for the second day in a row on Thursday. The pair maintains its buying tone throughout the first half of the European session and is currently trading around 1.3360just a few pips below the weekly high of 1.3377 hit earlier in the day.
Crude oil prices remain under pressure near the monthly low, which in turn weighs on the commodity currency CAD and acts as a tailwind for the USDCAD pair amid a modest rebound in demand for the US dollar. A new outbreak of COVID-19 in China raises concerns about a slowdown in fuel demand the world’s largest importer of crude oil. This, to a greater extent, overshadows concerns about tight global supplies and continues to weigh on black gold.
On the other hand, dollar attracts some safe-haven flows after further move lower in equity markets. In addition, upbeat US retail sales data on Wednesday may have forced investors to lower their expectations for a less hawkish policy from the Fed. This follows on from a rise in US Treasury yields. The US, which is seen as another factor that benefits the dollar and offers additional support for the USDCAD pair.
Apart from the fundamental factors mentioned, the previous day’s failure near the technically significant 100-day SMA has traders lightening their bearish bets around the USDCAD pair. The bulls, however, could wait for a continuation beyond the 1.3360 zone before positioning for further gains intraday. The US economic calendar includes the Philadelphia Fed manufacturing index and the usual weekly jobless claims.
Traders will follow the speeches of the most influential members of the FOMC. This, coupled with US bond yields and broader risk sentiment, will boost demand for the US dollar and provide some lift to the USDCAD pair. Aside from this, oil price dynamics should also help produce short-term opportunities around the pair.
USDCAD technical levels
Source: Fx Street
I am Joshua Winder, a senior-level journalist and editor at World Stock Market. I specialize in covering news related to the stock market and economic trends. With more than 8 years of experience in this field, I have become an expert in financial reporting.
