USD/CAD: Indecisive around three-year low below 1.2300 despite downbeat WTI
|- USD/CAD bears keep reins despite latest corrective pullback.
- WTI remains on the back foot amid sluggish markets.
- US dollar weakness, Canada’s faster jabbing battle covid woes, pre-NFP cautious sentiment.
USD/CAD fades recovery moves from the lowest since 2018 while taking rounds to 1.2270 amid Thursday’s Asian session. In doing so, the Loonie pair struggles to justify the recent weakness of WTI, Canada’s key export, as well as the coronavirus (COVID-19), worries ahead of the US and Canadian employment data, up for publishing on Friday.
The quote refreshed multi-day low the previous day as the US dollar’s pullback, amid broad risk-on mood, joined downbeat US data and Canada’s push for faster vaccinations. However, the mixed mood before Friday’s US NFP and Canada’s jobs report trouble USD/CAD bears afterward.
The Canadian government announced further covid restrictions in Alberta province the previous day. Also on the negative side could be the recently weaker data from Ottawa and the Bank of Canada’s (BOC) bullish bias.
Amid these plays, Wall Street closed mixed but the US Treasury yields and the US dollar index (DXY) held lower ground on Wednesday. Further, S&P 500 Futures struggle for clear direction by the press time. Additionally, WTI drops 0.24% to retest $65.10 figures, down for the second consecutive day, as traders prepare for the week’s key events.
Moving on, an absence of major data/events can keep troubling USD/CAD but the broad bearish trend remains intact.
Read: Canadian Jobs Preview: US demand likely to outweigh covid concerns, push hiring, CAD higher
Technical analysis
While 1.2320-25 guards the quote’s short-term recovery, March’s low near 1.2365 adds to the upside filters. Meanwhile, the year 2018 low near 1.2050-45 becomes the key support to watch during further USD/CAD declines.
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