- USD/CAD faces double whammy and hits two-week lows.
- Dollar sell-off on stimulus hopes, WTI surge down the spot.
- Bears await Canadian jobs data, stimulus news for fresh cues.
The USD/CAD pair extends its downside consolidative mode near two-week lows below 1.3200, mainly weighed down by the persistent downbeat mood around the US dollar when compared to its major rivals.
The recent downtrend in the greenback is mainly tied to the market optimism on the US fiscal stimulus hopes, as the Republican and Democratic policymakers agree on a final push to reach a comprehensive aid package after President Donald Trump abruptly abandoned talks earlier this week.
Further, easing US political uncertainty amid a sound recovery in the president’s health condition also boosted the investors’ sentiment at the expense of the safe-haven American dollar. The US dollar index sits at three-week lows of 93.43, down 0.15% on the day.
On the CAD side of the story, the Loonie continues to find support from the recent surge in oil prices, courtesy of the Norwegian oil output disruption and risk-on market profile.
Also, markets remain hopeful of a sub-10% unemployment rate, as Canada is set to add 156.6K jobs in September. A beat on the Canadian jobs data could offer extra legs to the downside in the spot.
- Canadian Jobs Preview: Loonie set for additional gains on sub-10% employment rate
USD/CAD: Technical levels
FXStreet’s Analyst Anil Panchal notes, a clear break below 1.3170/65 key support will make the pair vulnerable to challenge the September month bottom close to 1.2995. It’s should be noted that there are multiple barriers around the 1.3100 threshold during the downside between 1.3165 and 1.2995. Meanwhile, the early September high near 1.3260 can offer immediate resistance to the pair ahead of a downward sloping trend line from September 30, at 1.3306 now.”
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