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  • Fresh US dollar selling amid risk reset drive the prices lower.
  • But, negative oil prices keeps the Loonie on the back foot ahead of US core PCE and Fedspeak.

The bid tone around the US dollar weakened last hour, sending the USD/CAD back below the 1.31 handle. The sellers continue to lurk above the last, keeping a check on the upside.  

The spot stalled its steady recovery-mode near 1.3115 region again, as the CAD bull stood resilient to losses in oil prices and a major turnaround in the risk sentiment. The European equities picked up fresh bids and are seen staging a comeback, dragging the safe-haven US dollar broadly lower. The US dollar index faded a spike to 96.67 to now trade near the 96.50 region, up 0.20% on the day.

Meanwhile, both crude benchmarks are down nearly 1% amid the European political and global growth concerns that could cap the bounce in the resource-linked Loonie. Next of note for the major remains the US core PCE price index, which is seen arriving at 2% y/y in Sept.

USD/CAD Technical levels

Resistance

R1: 1.3115 (daily high)

R2: 1.3134 (Oct 19 high)

R3: 1.3160 (Oct 26 high)

Support

S1: 1.3048/42 (100, 20-DMA)

S2: 1.3018 (50-DMA)

S3: 1.3000 (key support)