- USD/CAD faced rejection near the 1.3600 mark amid some renewed USD selling bias.
- Weaker oil prices undermined the loonie and might help limit any meaningful slide.
The USD/CAD pair edged lower through the early European session and was last seen trading near the lower end of its daily trading range, around the 1.3570-65 region.
The pair failed to capitalize on its early uptick, instead was rejected near the 1.3600 round-figure mark amid the emergence of some fresh selling around the US dollar. The ever-increasing number of coronavirus cases in the US dampened prospects for a swift recovery for the domestic economy and kept exerting some pressure on the USD.
The greenback was also pressured by a weaker tone surrounding the US Treasury bond yields. This coupled with a slight improvement in the global risk sentiment, as depicted by a modest rebound in the equity markets, further undermined the safe-haven USD and further collaborated to the USD/CAD pair’s intraday pullback of around 30-35 pips.
Meanwhile, concerns that a continuous surge in COVID-19 cases could derail fuel demand recovery kept crude oil prices depressed on the first day of a new trading week. This, in turn, might hold investors from placing any aggressive bullish bets around the commodity-linked currency – the loonie – and help limit the downside for the USD/CAD pair.
Even from a technical perspective, the pair remains well within a broader trading range held since the beginning of this month. This makes it prudent to wait for a sustained move in either direction before traders start positioning for any meaningful movement amid absent relevant market-moving economic releases, either from the US or Canada.
Technical levels to watch
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