USD/CAD rallies to fresh one-week tops, inching closer to mid-1.3200s
|- USD/CAD gained some strong positive traction and rallied to one-week tops on Thursday.
- The downbeat market mood benefitted the safe-haven USD and remained supportive.
- A steep fall in crude oil prices undermined the loonie and provided an additional boost.
The USD/CAD pair continued scaling higher through the early North American session and shot to fresh one-week tops, around the 1.3235 region in the last hour.
A combination of supporting factors prompted some aggressive short-covering move on Thursday and assisted the USD/CAD pair to move away from over one-month lows, around the 1.3100 mark touched earlier this week.
Against the backdrop of a rapid rise in new coronavirus cases, the impasse over the next round of the US fiscal stimulus measures took its toll on the global risk sentiment. This, in turn, benefitted the US dollar's safe-haven status.
The USD bulls seemed rather unaffected by the disappointing release of the Empire State Manufacturing Index and the Initial Weekly Jobless Claims, instead took cues from the upbeat release of the Philly Fed Manufacturing Index.
On the other hand, a steep fall in crude oil prices – now down over 3.5% for the day – undermined the commodity-linked currency – the loonie – and provided an additional boost to the USD/CAD pair.
The strong intraday positive move took along some short-term trading stops placed near the 1.3165 horizontal level. A subsequent move beyond the 1.3200 round-figure mark further contributed to the latest leg of a sudden spike over the past hour or so.
The incoming headlines over the US fiscal stimulus measures will influence the USD price dynamics and produce some trading opportunities. Hence, it remains to be seen if the USD/CAD pair is able to capitalize on the move or meets with some fresh supply at higher levels.
Technical levels to watch
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