USD/CAD clings to key support near 1.3550 amid light trading

• USD/CAD licking its wounds after the sell-off overnight.
• Rising coronavirus cases in the US underpins the US dollar.
• Oil-price weakness caps the upside attempts in the CAD.

USD/CAD extends its Asian consolidative mode into early Europe, as the bears face exhaustion following the slump overnight.

Despite the sell-off, the spot held onto the key 1.3550 support, now trading flatlined just above the latter, as long US weekend-induced minimal volatility offers little zest to the traders.

Also, as the dust settles over the excellent US monthly jobs report, markets are trying a hand at risk assets once again but growing coronavirus concerns are likely to keep any advances in the Canadian dollar limited.

This is mainly in light of the renewed weakness in oil prices, as the bulls continue to face rejection on attempts above the 40 handle. Meanwhile, the virus fears could continue to bode well for the haven, the US dollar, keeping the USD/CAD buyers hopeful.

Should the rebound in the risk sentiment gain traction in the European session, the major could come under fresh selling pressure and give way to the 1.3350 support area. Meanwhile, the CAD bulls also continue to draw support from upbeat Canadian exports and Manufacturing PMI data.

Looking ahead, the pair will remain at the mercy of the sentiment on the European stocks and dollar price-action while the US celebrates its Independence Day holiday break.

USD/CAD technical levels

The pair appears on track to test the 200-day SMA support, currently at 1.3495. At press time, the pair is trading largely unchanged on the day at 1.3560, having put in a high of 1.3575 early Friday. The bias would turn bullish if the pair clears the multi-month descending trendline hurdle, currently at 1.3667, explains FXStreet’s Analyst Omkar Godbole.

USD/CAD additional levels