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  • USD/CAD remains depressed in multi-year troughs.
  • DXY’s weakness and BOC’s upbeat assessment weigh.
  • All eyes on US jobless claims and Canadian employment data.

USD/CAD is consolidating Wednesday’s sell-off ahead of the European open, as the bears gather pace for the next push lower.

At the time of writing, the major drops 0.13% to 1.2614, having hit over two-and-half-year lows at 1.2604 on the Bank of Canada’s (BOC) monetary policy decision.

The Canadian central bank maintained the key rate at 0.25% and sounded upbeat on the economic outlook, noting that the deployment of vaccines this year will help power a strong comeback for the economy. 

Further, US President Joe Biden’s first moves and likely expectations of more fiscal stimulus boost the risk sentiment and weigh down on the safe-haven US dollar. A broadly weaker US dollar keeps the sentiment around the spot undermined.

Meanwhile, stabilizing oil prices offer a fresh zest to the CAD bulls. The recovery in USD/CAD, however, appears elusive despite the overnight drop in WTI prices. The black gold tumbled following an unexpected build in the US crude stockpiles, as published by the API.  

In the day ahead, the spot will remain at the mercy of the market mood and the US dollar price action ahead of the US weekly jobless claims and Canadian ADP employment change data.

USD/CAD: Technical levels

“Oversold RSI conditions also challenge the quote’s further weakness and support odds for a corrective pullback towards the 1.2700 round-figure. On the flip side, a sustained downside past-1.2620 immediate support will have to break the 1.2600 round-figure before challenging the April 2018 low of 1.2525, “FXStreet’s Analyst Anil Panchal notes.

USD/CAD: Additional levels