- USD/CAD failed to capitalize on the previous day’s strong positive move to three-week tops.
- A modest uptick in oil prices underpinned the loonie and exerted some pressure on the pair.
- A subdued USD demand added to the selling bias, albeit coronavirus jitters helped limit the fall.
The USD/CAD pair extended its steady intraday retracement slide and refreshed daily lows, around the 1.3280-75 region during the early European session.
The pair witnessed some selling on Thursday and eroded a part of the previous day’s strong positive move of over 150 pips to three-week tops. The downtick was exclusively sponsored by a mildly positive tone around crude oil prices, which tend to underpin demand for the commodity-linked currency – the loonie.
On the other hand, the US dollar was seen consolidating the overnight gains amid uncertainty over the outcome of the US presidential election next week. This, along with a solid rebound in the US equity futures dented the greenback’s safe-haven status and contributed to the offered tone surrounding the USD/CAD pair.
However, concerns about the potential economic impact of fresh restrictions to curb the second wave of coronavirus infections extended some support to the USD’s global reserve currency status. This, in turn, might help limit any meaningful downside for the USD/CAD pair, rather attract some dip-buying at lower levels.
Moving ahead, market participants now look forward to the release of the Advance US Q3 GDP report for a fresh impetus. The US economy is expected to have recorded a strong growth of 31% annualized pace during the July-September quarter. Any significant divergence from the anticipated figures will influence the USD price dynamics and produce some meaningful trading opportunities later during the early North American session.
Technical levels to watch
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