The USD/CAD failed to halt its previous day selling bias and hit the multi-month low level near 1.3575 due to the risk-on market sentiment, undermining the broad-based U.S. dollar and pulled the currency pair lower. The reason for the sharp declines in the currency pair could also be attributed to the modest upticks in the crude oil prices, which underpinned the commodity-linked currency the Loonie and contributed to the currency pair declines.
Elsewhere, the pair's bearish bias was further bolstered by Wednesday's upbeat Canadian CPI, which also contributed to the Canadian dollar and contributed to the pair declines. Despite the continued rise in the number of coronavirus cases in the United States and Australia coupled with the on-going Sino-American conflict, the market traders cheered the optimism over a potential vaccine for the highly contagious COVID-19 disease, which was evident from the upbeat mood across the global equity markets. However, the upbeat market sentiment exerted some downside pressure on the U.S. dollar and sent the currency pair lower.
At the US-China front, the tussle between the United States and China remained on the card even took further pace as the United States Department recently ordered the Dragon Nation to close its consulate office in Houston within 72 hours. Whereas, the dragon nation also ordered the U.S. Consulate to leave from Wuhan. As well as, the U.S. President Donald Trump warned to use additional measures against China.
Whereas, the second wave of coronavirus outbreak in the U.S. dampened prospects for a quick turnaround for the domestic economy. As per the latest report, the virus continues to take its toll on global economies, with approximately 240,000 cases reported in the last 24 hours, over 60,000 just in the U.S.
Despite the rising U.S.-China tensions after the U.S. State Department ordered the Chinese consulate in Houston to close within 72 hours on Wednesday, the greenback failed to gain any positive traction and edged lower on the day. However, the losses in the greenback could be short-lived or temporary as the coronavirus continuously picking up pace in the U.S.
At the crude oil front, WTI crude oil prices took bids around $41 on the day backed by the upbeat market sentiment and U.S. dollar weakness. The massive fall in Saudi Arabia's oil exports in the month of May also gave support to the oil buyers. Although the upticks in the crude oil prices underpinned the commodity-linked currency, the Loonie and exerted some downside pressure on the currency pair. However, the Canadian dollar was being supported by Wednesday's data that showed domestic annual inflation in June posted its biggest acceleration in more than nine years.
The traders will keep their eyes on the weekly U.S. jobless claims that are scheduled to release on the day. This data might influence the USD price dynamics. The updates concerning the U.S. fiscal package discussions and vaccine news can offer intermediate moves to the pair.
Daily Support and Resistance
Pivot Point 1.3433
The USD/CAD pair has disrupted the triple bottom support mark of 1.3504 level, and presently it has the potential to head towards the following support mark of 1.3339. Both of the leading indicators, such as RSI and MACD, are holding in a selling zone, while the 50 periods EMA lingers at 1.3623. The opinion today is to remain bearish unto 1.3339, and beneath this, 1.3219 will be our aim. Good luck