The USD/CAD currency pair succeeded in stopping its losing streak of the previous session, and hit the session's high, close to the mid-1.3200 level, despite the losses in the broad-based US dollar, which were backed by uncertainty over the next round of the US fiscal stimulus measures.
On the other hand, the reason for the gains in the currency pair could be attributed to the mildly weaker oil prices, which eventually undermined the demand for the commodity-linked currency, the Loonie, and contributed to the gains in the currency pair. Currently, the USD/CAD currency pair is trading at 1.3235 and consolidating within the range between 1.3204 and 1.3255.
However, the doubts over the next round of the US fiscal stimulus measures and next Saturday's online meeting between US and Chinese officials, to discuss trade alongside other issues, have put an additional burden on the market trading sentiment. The US policymakers have been unable to agree over the much-awaited fiscal package to control the pandemic's economic impacts, as Democrats and Republicans still have many differences regarding the size of the package.
As a result, the broad-based US dollar failed to gain any positive traction, edging lower on the day, as doubts about the US economic recovery persisted amid coronavirus crisis woes. However, the US dollar losses became the key factor that capped any further upside in the currency pair. Meanwhile, the US Dollar Index, which tracks the greenback against a basket of other currencies, dropped by 0.08% to 93.243.
The WTI Crude Oil prices remained under selling pressure on the day. However, the decline in crude oil could also be attributed to the concerns about worsened US-China relations and the US coronavirus stimulus package's failure. Thus, the pullback in oil prices undermined demand for the commodity-linked currency, the Loonie, and continued to support the ongoing recovery momentum of the USD/CAD.
In the absence of any major data on the day, market traders will keep their eyes on the USD price dynamics and coronavirus headlines, which could play an important role in managing the intraday momentum.
Daily Support and Resistance
S1 1.3241
S2 1.3302
S3 1.3331
Pivot Point 1.3363
R1 1.3392
R2 1.3424
R3 1.3485
The USD/CAD has disrupted the descending triangle pattern at the 1.3243 level, and recently, it's been closing candles below this level. On the lower side, the violation of the 1.3243 level could lead to the USD/CAD pair towards the 1.3162 level, while the resistance continues to be found at around 1.3335. Let's look for selling trades below 1.3245 and buying trades over 1.3245 today. Good luck!