- USD/CAD continued gaining traction for the third consecutive session on Thursday.
- A softer tone around crude oil prices undermined the loonie and remained supportive.
- Mixed US economic releases failed to provide any impetus ahead of Powell’s speech.
The USD/CAD pair has now moved back to the top end of its daily trading range, with bulls making a fresh attempt to build on the momentum beyond the 1.3100 mark.
The pair quickly reversed a European session dip to the 1.3060-50 region and was being supported by a softer tone surrounding crude oil prices, which tend to undermine the commodity-linked loonie. Apart from this, the emergence of some US dollar buying over the past hour or so led to the latest leg of a sudden spike for the USD/CAD pair.
Despite concerns about the economic fallout from the continuous surge in new COVID-19 cases in the US, indications of a weaker opening in the US equity markets drove some haven flows towards the greenback. That said, a steep decline in the US Treasury bond yields held the USD bulls from placing aggressive bets and capped the upside for the USD/CAD pair.
Meanwhile, Thursday’s mixed US macro data failed to impress the USD bulls or provide any meaningful impetus to the major. In fact, the headline CPI remained in October and the yearly rate fell more than anticipated to 1.2%. Conversely, the US Initial Weekly Jobless Claims fell more-than-anticipated to 709K during the week ended November 6.
A muted market reaction to the US economic releases suggests that investors preferred to stay on the sidelines ahead of the Fed Chair Jerome Powell’s scheduled speech later during the US session. This, along with the broader market risk sentiment, will influence the USD price dynamics and produce some short-term trading opportunities.
Technical levels to watch
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