USD/CAD in search of a firm direction, flat-lined above 1.3100 mark
|- USD/CAD quickly reversed an early North American dip to the 1.3280 region.
- Weaker crude oil prices undermined the loonie and attracted some dip-buying.
- The US political uncertainty weighed on the USD and might cap the upside.
The USD/CAD pair refreshed daily lows, around the 1.3280 region during the early North American session, albeit quickly recovered few pips thereafter.
The pair witnessed some selling on the last trading day of the week and extended the previous session's late pullback from the vicinity of the 1.3400 mark, or one-month tops. The downtick was exclusively sponsored by a modest US dollar pullback, though the prevalent bearish sentiment surrounding oil prices undermined the commodity-linked currency – the loonie – and helped limit deeper losses.
Despite concerns about the potential economic fallout from the ever-increasing coronavirus cases, the USD bulls refrained from placing fresh bets amid the uncertainty about the outcome of the US presidential election. However, the prevalent risk-off environment continued lending some support the greenback's safe-haven status and helped limit any meaningful downside for the USD/CAD pair, at least for the time being.
On the other hand, the Canadian dollar got a minor lift following the release of stronger-than-expected domestic GDP figures for August. This, however, was largely offset by the ongoing decline in crude oil prices. investors remain worried that the imposition of fresh restrictions to curb the second wave of COVID-19 infection could hurt fuel consumption and dragged crude oil prices to multi-month lows.
Meanwhile, the USD/CAD pair quickly recovered around 35 pips from daily lows and was last seen trading with only modest losses, above the 1.3300 round-figure mark. Nevertheless, the pair still seems poised to end the week with strong gains, albeit a move beyond the 1.3400 level still seems elusive.
Technical levels to watch
Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers.