USD/CAD: Depressed around 1.3150 even as WTI recovery lack momentum
|- USD/CAD extends Friday’s losses, seesaws near intraday low off-late.
- WTI takes clues from possible US-Iran tussle, Iraq’s cutting of prices for Asia.
- Vaccine hopes, US dollar weakness adds to the overall weakness but a light calendar curbs the pair’s moves.
USD/CAD stays on the back foot for the second day in a row, down 0.15% to 1.3160, while heading into Monday’s European open. The loonie pair mainly takes advantage of the broadly risk-on mood that weighs on the US dollar. Also weighing on the quote are gains of Canada’s largest export item, crude oil.
With the AstraZeneca’s restart to the third phase of coronavirus (COVID-19) vaccine trials, followed by Pfizer’s claim to deliver the cure before 2020 ends, global markets shrug off the record surge in the virus cases registered on Sunday. Also helping the market optimism could be Oracle’s ability to convince ByteDance for TikTok sale.
While portraying the risk-on mood, S&P 500 Futures gain over 1.0% whereas stocks in Asia-Pacific follow the suit by the press time. The same dim the US dollar’s safe-haven demand and prints 0.10% losses by the US dollar index (DXY).
Other than the risk-on mood, WTI’s recovery from the mid-June low also helps the USD/CAD prices. Following rumors that Iran is plotting to avenge for the US killing of Qassem Soleimani, traders anticipate a fresh tussle between the Washington and Tehran that has been absent recently.
On contrary, Iraq’s following of Saudi Arabia and Abu Dhabi’s pattern of cutting prices for Asian buyers portray the virus-led fears of demand-supply mismatch even as another tropical storm is ready for terming as a hurricane.
Given the lack of major data/events, the pair traders will keep eyes on the risk catalysts and energy headlines for fresh impetus.
Technical analysis
The monthly ascending trend line near 1.3130 gains market attention unless the quote stays below 1.3300 round-figures, that’s above immediate resistances of 1.3260 and 50-day EMA around 1.3290.
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