- A combination of factors assisted USD/CAD to regain some positive traction on Tuesday.
- Concerns about the ever-increasing coronavirus cases benefitted the safe-haven greenback.
- A mildly weaker tone around oil prices undermined the loonie and remained supportive.
- A sustained move beyond the 1.3700 mark needed to increase prospects for further gains.
The USD/CAD pair edged higher during the early European session and refreshed daily tops, around the 1.3690 region in the last hour.
Following the previous day's intraday pullback and a brief consolidation through the early part of Tuesday's trading action, the pair managed to regain some positive traction and was being supported by a combination of factors.
The US dollar was back in demand amid fading hopes of a sharp V-shaped global economic recovery. The ever-increasing number of coronavirus cases served as a warning signal that the road to recovery will be much slower than expected.
Meanwhile, possibilities of renewed lockdown measures to contain the outbreak dampened prospects for a swift recovery in the fuel demand. This led to some weakness in oil prices and undermined the commodity-linked currency – the loonie.
However, the USD/CAD pair has repeatedly failed to find acceptance, or build on the momentum beyond the 1.3700 mark. The recent price action warrants some caution before positioning for any further near-term appreciating move.
Moving ahead, market participants now look forward to the US economic docket – featuring the release of Chicago PMI and the Conference Board's Consumer Confidence Index. Apart from this, the Fed Chair Jerome Powell is scheduled to testify before the House Financial Services Committee along with the US Treasury Secretary Steven Mnuchin. This might eventually influence the USD price dynamics and produce some short-term trading opportunities.
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. The author will not be held responsible for information that is found at the end of links posted on this page.
If not otherwise explicitly mentioned in the body of the article, at the time of writing, the author has no position in any stock mentioned in this article and no business relationship with any company mentioned. The author has not received compensation for writing this article, other than from FXStreet.
FXStreet and the author do not provide personalized recommendations. The author makes no representations as to the accuracy, completeness, or suitability of this information. FXStreet and the author will not be liable for any errors, omissions or any losses, injuries or damages arising from this information and its display or use. Errors and omissions excepted.
The author and FXStreet are not registered investment advisors and nothing in this article is intended to be investment advice.
Recommended content
Editors’ Picks
EUR/USD hovers around 1.0700 after German IFO data
EUR/USD stays in a consolidation phase at around 1.0700 in the European session on Wednesday. Upbeat IFO sentiment data from Germany helps the Euro hold its ground as market focus shifts to US Durable Goods Orders data.
USD/JPY refreshes 34-year high, attacks 155.00 as intervention risks loom
USD/JPY is renewing a multi-decade high, closing in on 155.00. Traders turn cautious on heightened risks of Japan's FX intervention. Broad US Dollar rebound aids the upside in the major. US Durable Goods data are next on tap.
Gold price flat lines above $2,300 mark, looks to US macro data for fresh impetus
Gold price (XAU/USD) struggles to capitalize on the previous day's bounce from over a two-week low – levels just below the $2,300 mark – and oscillates in a narrow range heading into the European session on Wednesday.
Worldcoin looks set for comeback despite Nvidia’s 22% crash Premium
Worldcoin (WLD) price is in a better position than last week's and shows signs of a potential comeback. This development occurs amid the sharp decline in the valuation of the popular GPU manufacturer Nvidia.
Three fundamentals for the week: US GDP, BoJ and the Fed's favorite inflation gauge stand out Premium
While it is hard to predict when geopolitical news erupts, the level of tension is lower – allowing for key data to have its say. This week's US figures are set to shape the Federal Reserve's decision next week – and the Bank of Japan may struggle to halt the Yen's deterioration.