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  • The emergence of some fresh USD selling capped the attempted recovery for USD/CAD.
  • The US political headlines remain the key driver of the sentiment surrounding the buck.
  • The USD bulls seemed unimpressed and shrugged off upbeat US monthly jobs report.
  • Weaker oil prices, disappointing Canadian employment details helped limit the downside.

The USD/CAD pair surrendered a major part of its intraday recovery gains and was last seen hovering near the lower end of its daily trading range, around mid-1.3000s.

The US dollar failed to capitalize on the early attempted recovery move, instead witnessed some fresh selling amid increasing odds that Democrat candidate Joe Biden will become the next US president. In the latest US election update, former Vice President Joe Biden has taken a small lead in the key battleground state of Pennsylvania.

With the US political headlines turning out to be an exclusive driver, the USD bulls seemed unimpressed, rather shrugged off Friday’s better-than-expected US monthly jobs report. In fact, the headline NFP showed that the US economy added 638K new jobs in October vs 600K expected. Adding to this, the unemployment rate plunged to 6.9%.

The emergence of some fresh US selling, in turn, was seen as one of the key factors that capped the upside for the USD/CAD pair. The downside, however, remained cushioned on the back of weaker crude oil prices, now down over 2% for the day, which tends to undermine demand for the commodity-linked currency – the loonie.

The Canadian dollar was further pressured by disappointing domestic employment details, which showed that the number of employed people increased by 83.6K in October as against 100K anticipated. Moreover, the unemployment rate fell less than expected to 8.9% from 9% previous. Nevertheless, the USD/CAD pair remains well within the striking distance of two-month lows set in the previous session and remains vulnerable to slide further.

Technical levels to watch