USD/CAD climbs to six-week tops, around mid-1.3300s

• USD/CAD built on this week’s bullish breakout momentum beyond the 1.3250-60 resistance zone.
• Concerns over rising COVID-19 cases underpinned the USD and was seen driving the pair higher.

The prevalent USD buying interest pushed the USD/CAD pair to fresh six-week tops, around the 1.3350-55 region during the early North American session.

Following the previous day’s two-way, directionless price moves, the pair caught some fresh bids on Wednesday and built on this week’s bullish breakout through the 1.3250-60 supply zone. The momentum was exclusively sponsored by a broad-based US dollar strength.

Concerns over rising COVID-19 cases and fears of renewed lockdown measures continued benefitting the greenback’s status as the global reserve currency. In fact, the key USD Index shot to two-month tops, which, in turn, was seen as a key factor driving the USD/CAD pair higher.

The USD bulls seemed rather unaffected, instead shrugged off comments by the Fed vice chair Richard Clarida. Speaking to Bloomberg TV, Clarida said that the Fed won’t begin to think about raising rates until inflation is clearly at 2% and additional fiscal support will be needed for the US recovery.

Market participants now look forward to the Fed Chair Jerome Powell’s second day of Congressional testimony. This along with scheduled speeches by a flurry of influential FOMC member will drive the sentiment surrounding the greenback and produce some meaningful trading opportunities.

In the meantime, traders are likely to take cues from the release of the flash version of the Marking US Manufacturing and Services PMI, due in a short while from now.

Technical levels to watch