USD/CAD slides to session low, around 1.3230; erases Tuesday’s positive move

• USD/CAD comes under some fresh selling pressure amid stronger oil prices.
• A subdued USD price action does little to impress bulls or lend any support.

The USD/CAD pair dropped to fresh session lows, around the 1.3230 region in the last hour and erased a major part of the overnight positive move.

The pair came under some fresh selling pressure on Wednesday and extended the previous session’s intraday pullback from near one-week tops. The downfall – marking the third in the previous four trading sessions and the fifth in the previous seven – was sponsored by a goodish pickup in crude oil prices, which tend to underpin demand for the commodity-linked currency – the loonie.

USD/CAD weighed down by stronger oil prices

Oil prices rose around 1.0% on Wednesday amid optimism over a slowdown in the number of new cases infected by the deadly coronavirus and concerns about supply after the United States (US) moved to cut more Venezuelan crude from the market. The US slapped sanctions on Rosneft Trading SA, the Geneva-based unit, which has been Venezuela’s primary conduit for brokering cargos.

On the other hand, the US dollar was seen consolidating its recent strong gains to multi-month tops. Despite the risk-on mood-led rebound in the US Treasury bond yields, the USD bulls refrained from placing any fresh bets and did little to lend any support to the major or stall the ongoing downfall back closer to the very important 200-day SMA support.

Moving ahead, market participants now look forward to Wednesday’s economic docket, highlighting the release of the latest Canadian consumer inflation figures. This coupled with the release of housing market data and Producer Price Index from the US, and speeches by influential FOMC members might contribute towards producing some meaningful trading opportunities.

Technical levels to watch