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  • USD/CAD added to its recent strong gains and continued scaling higher on Wednesday.
  • The ongoing slump in oil prices undermined the loonie and provided a strong boost.
  • Rallying US bond yields, sustained USD buying contributed to the strong momentum.

The USD/CAD pair continued scaling higher through the early European session and shot to fresh multi-year tops, around mid-1.4300s in the last hour.

A relentless fall in crude oil prices, now down around 6.0% for the day, continued weighing heavily on the commodity-linked currency – the loonie and turned out to be one of the key factors driving the pair higher.

This coupled with a strong US dollar buying interest, backed by the ongoing upsurge in the US Treasury bond yields, provided an additional boost to the major and remained supportive of the strong momentum.

The greenback was further supported by its status as the global reserve currency amid a fresh round of selloff across equity markets and mounting fears over the economic fallout from the coronavirus pandemic.

The intraday positive move took along some short-term trading stops near the overnight swing high and the 1.4300 mark, which seemed to be a key factor behind the latest leg of a sudden spike over the past hour.

It will now be interesting to see if bulls are able to capitalize on the move or opt to take some profits off the table amid extremely overbought conditions and ahead of the latest Canadian consumer inflation figures.

Technical levels to watch