- USD/CAD tracks fresh US dollar sell-off amid risk-on mood.
- WTI retreats, having little impact on the loonie.
- Focus remains on US stimulus news, Markit PMIs.
USD/CAD is pressuring the daily lows reached at 1.3114 in the last hour, undermined by the renewed weakness in the US dollar across its main peers.
A turnaround in the risk sentiment amid a rally in the European stocks weighed on the safe-haven dollar. The market mood improved after upbeat earnings reports and stronger Eurozone and German Preliminary Manufacturing PMIs drove the regional indices higher.
Further, the optimism over a likely US fiscal stimulus deal also adds to the reduced haven demand for the buck. House Speaker Nancy Pelosi showed Thursday a sense of urgency to reach an agreement by stating that “we are just about there.”
On the CAD-side of the story, a lack of relevant Canadian macro news puts focus on the WTI-price movement for cues on the resource-linked loonie. At the moment, the retreat in the US oil after Thursday’s recovery rally fails to offer any positive impact on the CAD.
Next of relevance for the major remains the US Markit Preliminary Manufacturing and Services PMI report for September. Meanwhile, the updates on the US fiscal stimulus negotiations will keep the dollar traders entertained.
USD/CAD technical levels
The next downside target is aligned at 1.3100 (round numbers), below which the daily classic S2 at 1.3087 could be exposed. To the upside, stiff resistance at 1.3144 (pivot point/ 5-DMA) needs to be scaled for a test of the 50-DMA barrier at 1.3197.
USD/CAD additional levels
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