“¢ The US midterm election results prompt some selling around the USD.
“¢ Bearish oil prices undermine Loonie and help limit further downside.
The USD/CAD lacked any firm directional bias and seesawed between tepid gains/minor losses through the early European session on Wednesday.
With an intraday swing from a three-day high level of 1.3159 to the 1.3100 neighborhood, it is turning out to be a rather volatile trading session for the pair and the moves were influenced by the incoming US midterm election results.
Tuesday’s vote confirmed a split Congress in the US and was now seen making it difficult for the US President Donald Trump to pursue aggressive policies, including any further fiscal stimulus, which eventually prompted some fresh US Dollar selling.
As the dust around the US election settled, the prevalent bearish sentiment surrounding crude oil prices undermined the commodity-linked currency – Loonie and helped limit further downside, at least for the time being.
The pair now seems to have stabilized around 1.3120 region and in absence of any major market moving economic releases from the US, the USD price dynamics might continue to act as an exclusive driver ahead of the latest FOMC monetary policy update on Thursday.
Technical levels to watch
The 1.3100 handle might continue to act as an immediate support and is closely followed by 100-day SMA, around the 1.3075-70 region, below which the pair is likely to accelerate the fall further towards testing the key 1.30 psychological mark.
On the flip side, the 1.3150-55 region now becomes an immediate strong hurdle, which if cleared might trigger a fresh short-covering rally and assist the pair to aim towards reclaiming the 1.3200 handle en-route the 1.3225 supply zone.
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