USD/CAD rebounds modestly after dropping below 1.3200 for first time since February

• USD/CAD continues to trade deep in the negative territory.
• Falling crude oil prices help USD/CAD recover modestly.
• US Dollar Index inches lower toward 93.00 in American session.

The USD/CAD pair extended its daily slide during the American trading hours and touched its lowest level since February at 1.3190. However, the pair recovered modestly following that drop and was last seen trading at 1.3220, where it was still down 0.17% on a daily basis.

USD selloff continues

The broad-based selling pressure surrounding the greenback caused the bearish momentum of USD/CAD to pick up in the second half of the day. The data published by the US Department of Labor showed that Initial Jobless Claims came in below one million for the first time since March and helped the market sentiment remain upbeat. 

Despite a lack of progress in the US coronavirus aid bill talks, the risk-positive environment weighed on the USD and forced the US Dollar Index (DXY) to push lower toward 93.00. As of writing, the DXY was down 0.35% on the day at 93.09.

On the other hand, crude oil prices turned south in the last hour and made it difficult for the commodity-sensitive loonie to continue to gather strength against the buck. At the moment, the barrel of West Texas Intermediate is down 0.2% on the day at $42.45.

In the early trading hours of the Asian session on Friday, Industrial Production and Retail Sales data from China will be looked upon for fresh impetus. Better-than-expected figures could provide a boost to oil prices and allow the CAD to outperform its rivals. 

Technical levels to watch for