USD/CAD climbs back to multi-year tops, around mid-1.4200s amid weaker oil prices

• USD/CAD regains traction on Wednesday and climbs back closer to multi-year tops.
• A fresh leg down in oil undermined the loonie and remained supportive of the move.
• A strong pickup in the US bond yields might help revive USD demand and inspire bulls.

The USD/CAD pair edged higher through the early European session and has now moved back closer to multi-year tops, around mid-1.4200s.

Following the previous day’s intraday pullback, the pair managed to regain traction on Wednesday. The uptick was supported by an offered tone surrounding the commodity-linked currency – the loonie amid a fresh leg down in crude oil prices.

The bearish pressure in the oil market remained intact amid growing concerns over the economic fallout from the coronavirus pandemic. This coupled with possibilities of a global supply glut dragged the black gold to its lowest level in almost 17 years.

With the oil price dynamics turning out to be an exclusive driver of the pair’s uptick on Wednesday, bulls seemed rather unaffected by a modest US dollar pullback on Wednesday and extremely oversold conditions on short/medium charts.

Meanwhile, some follow-through pickup in the US Treasury bond yields might help revive the USD demand and might eventually pave the way for an extension of the pair’s recent strong positive momentum witnessed over the past one month or so.

Moving ahead, Wednesday release of the latest Canadian consumer inflation figures and housing market data from the US will be looked upon for some meaningful trading opportunities later during the early North-American session.

Technical levels to watch