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  • USD/CAD eases from two-day top, keeps mild gains above 1.3300.
  • Pullback of the US dollar, WTI probe the bulls.
  • October month PMIs can offer immediate direction, risk catalysts will be the key.

USD/CAD drops to 1.3330, up 0.13% intraday, ahead of Monday’s European session. The quote earlier surged to 1.3370 before declining to 1.3327. While risk sentiment keeps early-Asia’s cautious optimism, the US dollar buyers turn cautious ahead of tomorrow’s American presidential election, which in turn weighs on the quote.

US dollar index (DXY) fizzles upside momentum after refreshing the fresh high since September 30. The greenback gauge initially stretched the three-day winning streak after the coronavirus (COVID-19) woes joined market worries before this week’s key events.

Not only the DXY moves but the WTI’s pullback from the fresh low since May 29 also dragged the USD/CAD downwards. Given the oil being the highest export earner for Canada any weakness in WTI weighs on the Canadian Dollar (CAD). The energy benchmark dropped to a multi-month low, before recovering from $33.84, on demand concerns.

While printing the risk scenario, S&P 500 Futures, as well as stocks in Asia-Pacific, print mild gains whereas US 10-year Treasury yields catch a breather after crossing 200-day SMA for the first time since 2018 earlier.

Moving on, Canada’s Markit Manufacturing PMI for October, expected 55.6 versus 56.00 prior, will precede the US ISM Manufacturing PMI, forecast 55.6 against 55.4 previous, to offer near-term direction to the USD/Cad prices. However, major attention will be given to Tuesday’s US presidential election.

Technical analysis

USD/CAD recently crossed a confluence of 100-day SMA and a falling trend line from June 26 amid the bullish MACD, which in turn directs the bulls toward September month’s high of 1.3420. However, a daily closing below 1.3320/25 technical joint might not refrain from calling back the October 15 high of 1.3259 on the chart.