The USD/CAD remains under pressure near its intraday lows, undoing yesterday’s rebound. Concerns about the Fed and the Coronavirus are worsening market sentiment. With the dollar weakening, oil prices welcome lower yields after a two-day downward trend. The USD/CAD forecast is neutral as the pair has shed off its last day gains. However, the outlook is still bullish biased. The USD/CAD pair remains in the red at 1.2650, down 0.17% for the day ahead of Tuesday’s European session. –Are you interested to learn more about AI trading brokers? Check our detailed guide- To be clear, the loonie pair pays little attention to virus problems at home but encourages cautious optimism on the macroeconomic front. Crude oil prices for WTI, Canada’s most important export, are rising, favoring the USD/CAD quotes. According to Reuters, as the Omicron variant spread throughout Canada, the US Centers for Disease Control and Prevention (CDC) and the US State Department advised against traveling to the neighboring country on Monday. However, Reuters’ tally shows that more than 1.13 million infections occur each day in the US, an all-time high. In contrast, according to comments prepared for today’s speech, Chairman Powell’s hawkish remarks can be viewed as very conducive to risk-taking. Nevertheless, despite his promise to prevent higher inflation from stabilizing, the Fed chief continues to fear a rate hike and weighs on sentiment. It’s worth noting that Merck’s statement, “Expect the molnupiravir mechanism to work against the omicron, any variant of the Coronavirus,” can be considered a positive example of risk-taking. Get FREE Forex Signals Now! In other news, oil prices rose 0.33% that day to $ 78.25 at the latest, ending a two-day decline as market optimism stokes demand for the US dollar as a safe haven ahead of important dates and events. Following sentiment, the US 10-year Treasury yield fell 1.5 basis points (bps) to 1.757% after climbing to January 2020 levels the day before closing in the red. In addition, the coupons of the 2-year bonds will remain unchanged at the level of March 2020, at the very least at 0.90%. Aside from that, intraday S&P 500 futures rose 0.07%, while stocks in the Asia-Pacific region traded mixed. Participants will keep an eye out for the latest news about the Coronavirus as an intermediate step. Still, the statement by Fed Chairman Powell at the end of December, along with the consumer price index (CPI) for the US, will be crucial in determining the direction. –Are you interested to learn more about Canada forex brokers? Check our detailed guide- USD/CAD price technical forecast: Demand zone to protect the downside The USD/CAD price bounced from the demand zone yesterday. We saw a strong shakeout bar with bullish volume. However, the price found rejection around the 20-period SMA (4-hour chart) and reversed the gains just ahead of the 1.2700 level. However, the price is still above its demand zone while the volume for the minor down wave is decreasing. It indicates that the bullish potential still exists. As long as the 1.2600 level remains intact, the bulls will aim for a 1.2700 breakout towards 1.2750 as the next target. Looking to trade forex now? Invest at eToro! Trade Forex Now! 68% of retail investor accounts lose money when trading CFDs with this provider. You should consider whether you can afford to take the high risk of losing your money. Saqib Iqbal Saqib Iqbal Saqib Iqbal is a market analyst, prop fund trader and mentor, serving the industry with his analysis and educational content since 2011. The author has great exposure to different financial markets and institutions. He's well-known for his day trading reviews and multiple timeframe analysis. View All Post By Saqib Iqbal Majors share Read Next Free Forex Signals and Forecast: Buy USD/MXN – 11 Jan 2022 Olimpiu Tuns 2 weeks The USD/CAD remains under pressure near its intraday lows, undoing yesterday's rebound. Concerns about the Fed and the Coronavirus are worsening market sentiment. With the dollar weakening, oil prices welcome lower yields after a two-day downward trend. The USD/CAD forecast is neutral as the pair has shed off its last day gains. However, the outlook is still bullish biased. The USD/CAD pair remains in the red at 1.2650, down 0.17% for the day ahead of Tuesday's European session. -Are you interested to learn more about AI trading brokers? 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