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  • USD/CAD met with some supply on Wednesday and snapped three days of winning streak.
  • The downtick was exclusively sponsored by the emergence of fresh selling around the USD.
  • Sliding oil prices might undermine the loonie and helped limit deeper losses for the major.

The USD/CAD pair remained depressed through the early European session and was last seen hovering near the lower end of its daily trading range, around the 1.2885 region.

The pair witnessed some selling during the first half of the trading action on Wednesday and for now, seems to have snapped three consecutive days of the winning streak. The downtick was exclusively sponsored by the emergence of some fresh selling around the US dollar and seemed rather unaffected by sliding crude oil prices.

The greenback struggled to capitalize on this week’s rebound from over two-and-half-year lows despite concerns about the discovery of a new fast-spreading coronavirus variant. Even the underlying cautious mood in the equity markets failed to benefit the USD’s perceived safe-have status or lend any support to the USD/CAD pair.

The global risk sentiment remained fragile amid the imposition of fresh lockdowns/travel restrictions in the UK and persistent Brexit uncertainties. Adding to this, the US President Donald Trump threatened not to sign a long-awaited $892 billion coronavirus relief bill, which further dented investors’ appetite for riskier assets.

Meanwhile, worries over a slower recovery in fuel demand led to some follow-through weakness in crude oil prices for the third consecutive session on Wednesday. This, in turn, might undermine the commodity-linked currency –  the loonie – and help limit any deeper losses for the USD/CAD pair, at least for the time being.

Market participants now look forward to US economic docket, highlighting the release of Durable Goods Orders and Initial Weekly Jobless Claims. Apart from this, the broader market risk sentiment, developments surrounding the coronavirus saga and the US stimulus headlines might further produce some trading opportunities around the USD/CAD pair.

Technical levels to watch