USD/CAD drops to 1.3950 area on broad-based USD weakness

• Fed announced new measures to provide $2.3 trillion worth of loans to support economy.
• Unemployment Rate in Canada jumped to 7.8% in March from 5.6%.
• WTI trades below $26 as investors wait for conclusion of OPEC+ meeting.

The USD/CAD pair came under strong bearish pressure in the second half of the day even after the data from Canada showed a more-than-expected increase in the Unemployment Rate in March. As of writing, the pair was trading at 1.3955, erasing 0.4% on a daily basis. 

Statistics Canada on Thursday reported that the Unemployment Rate in March climbed to 7.8% from 5.6% in February with the Participation Rate slumping to 63.5% in the same period. Although both of these readings missed market expectations by a wide margin, the pair extended its slide on broad-based USD weakness.

DXY drops to fresh weekly lows

The Federal Reserve announced that it has taken new actions to provide up to $2.3 trillion in loans to support the economy. The US Dollar Index (DXY) quickly turned south and broke below the 100 handle. Later in the session, FOMC Chairman Jerome Powell reiterated that the Fed won’t hesitate to move into new areas if more support is needed. At the moment, the DXY is down 0.6% on the day at 99.55.

Meanwhile, the latest market chatter suggests that Russia and Saudi Arabia have reached a deal on oil output cuts and are looking to convince other producers to join production reductions. Nevertheless, investors seem to be reluctant to make any bets before hearing an official announcement with the barrel of West Texas Intermediate (WTI) trading in the red below $26 and keeping the pair’s downside for the time being.

Technical levels to watch for