The USD/CAD currency pair failed to stop its Asian session losing streak and dropped further below the 1.3400 level, mainly due to the U.S. dollar selling bias in the wake of modest risk-on market sentiment possibly backed by the hopes of substantial stimulus from global policymakers and vaccine hopes. Besides, the weaker oil prices triggered by the continuous surge in COVID-19 cases and US-China on-going war undermined the commodity-linked currency the loonie, which becomes the critical factor that helped the currency pair to limit its deeper losses.
If talking about the U.S. virus condition, the United States crossed 4 million officially recorded Covid-19 cases and covered a significant part of that recorded in just the last 15 days. Almost 1,000 above people died each day between Tuesday and Friday in the U.S. whereas, there were also a near-record 74,000 new cases on Friday. California, with a population of almost 40 million, about twice Florida's, is now the worst-hit state, near 450,000 cases. Globally, the number of coronavirus infections has now crossed 16 million, as per the Johns Hopkins University report. However, the non-stop virus cases continuously affecting global economic growth. This, in turn, the U.S. dollar dropped to 22-month lows and helped the currency pair.
As a result, the growing market concerns that the U.S.'s economic recovery could be grinding to a halt due to the resurgence in coronavirus cases also undermined the U.S. dollar and contributed to the pair losses. Despite the heightened concerns of the US-China war, the broad-based U.S. dollar failed to gain any safe-haven bid, and reporting losses on the day instead was further pressured by a positive tone around the equity markets.
The declines in the U.S. dollar were further bolstered by the U.S.'s failure to deliver the additional coronavirus package and a record rise in the number of daily COVID-19 cases. Whereas, the losses in the U.S. dollar kept the currency pair higher. Whereas, the U.S. Dollar Index that tracks the greenback against a basket of other currencies slipped 0.47% to 93.933 by 12:15 AM ET (05:15 AM GMT), continuing its slide from Friday.
At the crude oil front, the WTI crude oil prices remain around 41 levels as concerns about the continuous surge in COVID-19 cases could halt fuel demand recovery. However, the losses in crude oil undermined the commodity-linked currency. The loonie helped limit deeper losses in the pair.
Looking forward, the market players will keep their eyes on the U.S. economic docket, which will show the release of Durable Goods Orders later during the early North American session. In the meantime, investors will keep their eyes also on the broader market risk sentiment, which could play a key role in influencing the intraday momentum for the currency pair.
Daily Support and Resistance
Pivot Point 1.3392
The USD/CAD is consolidating with a mixed sentiment near 1.3385. Simultaneously, overall trading sentiment continues to be bearish as the pair trades within a bearish channel that produces resistance at the 1.3385 mark. A bearish breakout at 1.3362 could prolong sell-off unto the next support mark of 1.3318. Additional selling sentiment could be seen beneath the 1.3318 level. Overall, the RSI and MACD also signal bearish bias in the pair. Hence, we should be seeing for selling trades beneath the 1.3360 level, to seize a quick 50 pips. Good luck!