- USD/CAD eases from intraday high, keeps bounce off fresh four-day low.
- Dollar index extends pullback from five-week top, WTI fades recovery moves amid mild risk-on.
- US 2020 presidential elections in the spotlight, blue wave eyed.
USD/CAD bears catch a breather after refreshing weekly low, recedes to 1.3224, during the pre-European session. The quote marked the heaviest drop since July 15 the previous day as the US dollar reversed from the monthly top while prices of oil, Canada’s biggest export item, also marked notable recovery after refreshing the multi-day low.
Global markets struggle for clear directions ahead of the key US presidential elections. Although major polls suggest Democratic Party’s victory, challenges to the blue wave, a condition where they gain major in both the American houses, seem to have risen off-late.
As a result, the US dollar index (DXY) extends the previous day’s pullback from the highest since September 29 while declining below 94.00 at the time of writing. Also portraying the cautious optimism could be the upbeat performance of S&P 500 Futures and Asia-Pacific stocks.
Read: 2020 Elections: Three states traders should watch, plus places that could provide surprises
WTI respects industry expectations of soft demand, mainly due to the coronavirus (COVID-19)-led economic slowdown. The energy benchmark currently drops 0.48% intraday to $37.00. It’s worth mentioning that the market’s risk-on mood favored the black gold to flash the biggest gains in a month even after declining to the lowest since May 29 earlier on Monday.
Moving on, a light calendar and the pre-event trading lull may restrict the pair’s short-term performance ahead of the voting begins in the US. While polls favoring a blue wave can weigh on the pair, US President Donald Trump is known for a surprise. Overall, it’s going to be a volatile day ahead.
Technical analysis
A confluence of 21-day and 50-day SMA, currently around 1.3200, restricts short-term USD/CAD downside. Alternatively, a daily closing beyond 100-day SMA, at 1.3324 now, can aim for the previous month’s top bear 1.3390.
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