USD/CAD rebounds swiftly from 1-1/2 week lows, jumps to 1.4100 neighbourhood
|- A modest intraday rebound in the USD assisted USD/CAD to gain some positive traction.
- An intraday pullback in oil prices undermined the loonie and remained supportive of the move.
The USD/CAD pair recovered around 80-90 pips from sub-1.40 levels, or 1-1/2 week lows and shot to fresh session tops in the last hour.
The pair stalled its recent sharp pullback from multi-year tops and the intraday bounce was supported by some signs of easing bearish pressure surrounding the US dollar.
Following a week-long downtrend, triggered by the Fed's unlimited QE, the greenback managed to find some support at lower levels and extended some support to the major.
The pair's intraday uptick was further supported by a modest intraday pullback in crude oil prices, which tend to undermine demand for the commodity-linked currency – the loonie.
As investors digested the latest optimism over a massive $2.2 trillion US economic stimulus package, concerns over a plunge in demand kept a lid on the early positive move in oil prices.
Thursday's unprecedented jump in the US initial weekly jobless claims provided further evidence of the devastating impact on the US economy from the coronavirus pandemic.
The incoming data fueled worries over an imminent global recession. This comes on the back of the coronavirus-led travel bans and added to concerns over shrinking oil demand.
It, however, remains to be seen if the ongoing bounce back closer to the 1.4100 round-figure mark is backed by any genuine buying or is solely led by some near-term short-covering move.
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.