USD/CAD trims gains below 1.3200 amid market consolidation
|- USD/CAD fizzles upside momentum while easing from 1.3177.
- WTI remains pressured near one-week low, marked today.
- Risk-off mood, US dollar pullback play their roles amid mixed signals concerning American stimulus, Brexit and geopolitical fears.
USD/CAD trims early-day gains while stepping back from the intraday high of 1.3177 to 1.3157 ahead of Thursday’s European session. Even so, the pair prints 0.11% gains on a day as traders wobble after the Asian session risk-off.
Following a heavily optimistic market performance of Wednesday, mainly driven by hopes of the US coronavirus (COVID-19) stimulus package, traders probed risk-on mood amid mixed messages. Among them, fears that the US House Majority Leader Mitch McConnell will not help avail the much-awaited aid package before the presidential elections gained major attention. Also in the limelight was news that Iran and Russia meddled in the American elections.
Furthermore, fears that the COVID-19 wave 2.0 is getting stronger in the US and Australia, following the hit in Europe, join the Brexit woes. The latest data on the virus, per Reuters, suggest that over 50% of the US states have refreshed monthly high of the new cases whereas there are five new cases in Victoria that ruined a 14-day average. Additionally, doubts over the soft Brexit, considering the thorny issues, also challenge the previous day’s upbeat sentiment.
As result, the US dollar index (DXY) bounces off a seven-week low to add 0.07% while taking rounds to 92.73. Further to portray the risk aversion, the US stock futures and shares in Asia-Pacific also dwindle whereas WTI drops below Wednesday’s low, actually the lowest since October 14.
Given the market’s consolidation amid mixed messages, USD/CAD traders will wait for strong clues to extend the Asian session’s performance. As a result, risk headlines could be closely followed in addition to the second-tier data from the US.
Technical analysis
Unless breaking a two-week-old falling trend line, currently near 1.3190, USD/CAD bears should stay hopeful. Though, fresh selling could be wise below 1.3100.
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