USD/CAD climbs to one-week tops, eyeing a sustained move beyond 1.2800 mark

USD/CAD gained strong positive traction for the second consecutive session on Monday.
COVID-19 jitters weighed on the risk sentiment and benefitted the safe-haven greenback.
Weaker oil prices undermined the loonie and remained supportive of the strong move up.

Haresh Menghani FXStreet

The USD/CAD pair climbed to one-week tops during the first half of the European session, with bulls now eyeing a sustained move beyond the 1.2800 mark.

A combination of supporting factors assisted the pair to build on the previous session's strong rebound from the vicinity of multi-year lows and gained some follow-through traction on Monday. Concerns about the continuous surge in new COVID-19 cases dented investors' sentiment and benefitted the US dollar's relative safe-haven status.

Investors remain worried about the potential economic fallout from the coronavirus pandemic and imposition of fresh lockdown measures. This, in turn, dampened prospects for a recovery in the fuel demand and weighed on crude oil prices. This was seen as another factor that undermined the commodity-linked loonie and provided an additional boost to the USD/CAD pair.

That said, the risk-off mood led to some follow-through pullback in the US Treasury bond yields, which held the USD bulls from placing aggressive bets. This, along with a modest intraday bounce in oil prices, might further collaborate towards capping any runaway rally for the USD/CAD pair amid absent relevant market-moving economic releases, either from the US or Canada.

This makes it prudent to wait for some strong follow-through buying before confirming that the USD/CAD pair has bottomed out in the near-term and positioning for any further appreciating move. The market focus will now shift to the latest monetary policy update by the Bank of Canada, scheduled to announced later this week on Wednesday.

In the meantime, developments surrounding the coronavirus saga will play a key role in influencing the broader market risk sentiment and demand for the safe-haven USD price dynamics. Apart from this, oil price dynamics will also be looked upon for some short-term trading opportunities around the USD/CAD pair.

Technical levels to watch

USD/CAD

Overview
Today last price	1.279
Today Daily Change	0.0056
Today Daily Change %	0.44
Today daily open	1.2734

Trends
Daily SMA20	1.2763
Daily SMA50	1.2866
Daily SMA100	1.3035
Daily SMA200	1.3335

Levels
Previous Daily High	1.2765
Previous Daily Low	1.2634
Previous Weekly High	1.2836
Previous Weekly Low	1.2625
Previous Monthly High	1.301
Previous Monthly Low	1.2688
Daily Fibonacci 38.2%	1.2715
Daily Fibonacci 61.8%	1.2684
Daily Pivot Point S1	1.2657
Daily Pivot Point S2	1.258
Daily Pivot Point S3	1.2526
Daily Pivot Point R1	1.2787
Daily Pivot Point R2	1.2841
Daily Pivot Point R3	1.2918

Author

Haresh Menghani

FXStreet

Haresh Menghani is a detail-oriented professional with 10+ years of extensive experience in analysing the global financial markets.

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