- USD/CAD fails to capitalize on the overnight positive move to two-week tops.
- Some follow-through USD pullback seemed to exert some downward pressure.
- A modest uptick in oil underpinned the loonie and added to the weaker tone.
The USD/CAD pair edged lower through the early European session and dropped to fresh daily lows, around the 1.3280 region in the last hour.
A combination of negative factors failed to assist the pair to build on the previous day’s goodish intraday positive move to two-week tops, rather prompted some fresh selling through the early part of Tuesday’s trading action.
USD/CAD weighed down by a combination of factors
The US dollar added to the overnight modest losses and remained depressed for the third consecutive session amid renewed Fed rate cut speculations, with bulls shrugging off a modest intraday pickup in the US Treasury bond yields.
Apart for some USD weakness, a mildly positive tone around the oil market – supported by a turnaround in the risk-sentiment – helped revive demand for the commodity-linked currency – the loonie – and exerted some pressure on the major.
However, concerns that the coronavirus outbreak will weaken the world economy might keep a lid on any strong gains for oil prices and eventually attract some dip-buying around the major, warranting some caution for bearish traders.
Moving ahead, market participants now look forward to the US economic docket, highlighting the release of the Conference Board’s Consumer Confidence Index, for some short-term trading impetus later during the early North-American session.
Technical levels to watch
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