USD/CAD corrects from 4-year tops, downside seems limited amid a slump in oil prices

  • USD/CAD failed to capitalize on its early positive move to over four-year tops.
  • Sliding US bond yields led to some USD weakness and prompted profit-taking.
  • Weaker crude oil prices might undermine the loonie and help limit deeper losses.

The USD/CAD pair extended its intraday pullback from over four-year tops and refreshed daily lows, around the 1.3755 region during the early European session.

The pair failed to capitalize on its early uptick to levels beyond the 1.3800 round-figure mark and has now drifted into the negative territory amid some renewed US dollar selling.

Falling oil prices might help limit losses

Growing market concerns about the economic impact of the coronavirus continued weighing on investors' sentiment and the same was evident from a selloff across the global equity markets.

The already weaker sentiment took another blow after the World Health Organization declared COVID-19 a pandemic and the US President Donald Trump suspended all travel from Europe for 30 days.

The anti-risk flow was further reinforced by a fresh leg down in the US Treasury bond yields, which kept the USD bulls on the defensive and prompted some profit-taking around the major.

Meanwhile, the USD failed to gain any respite from the fact that Democrats on Wednesday unveiled a broad package of proposals to help Americans affected by the coronavirus outbreak.

The pair's intraday slide of over 60 pips seemed rather unaffected by a slump in crude oil prices, which tend to undermine demand for the commodity-linked currency – the loonie.

Hence, it will be prudent to wait for some strong follow-through selling before confirming that the pair might have topped out in the near-term and positioning for any further corrective slide.

Technical levels to watch


Today last price 1.3756
Today Daily Change -0.0019
Today Daily Change % -0.14
Today daily open 1.3775
Daily SMA20 1.3378
Daily SMA50 1.3236
Daily SMA100 1.3211
Daily SMA200 1.3214
Previous Daily High 1.3795
Previous Daily Low 1.3682
Previous Weekly High 1.344
Previous Weekly Low 1.3315
Previous Monthly High 1.3465
Previous Monthly Low 1.3202
Daily Fibonacci 38.2% 1.3752
Daily Fibonacci 61.8% 1.3725
Daily Pivot Point S1 1.3706
Daily Pivot Point S2 1.3637
Daily Pivot Point S3 1.3593
Daily Pivot Point R1 1.3819
Daily Pivot Point R2 1.3863
Daily Pivot Point R3 1.3932



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.

Feed news

How do emotions affect trade?
Follow up our daily analysts guidance

Subscribe Today!    

Latest Forex News

Latest Forex News

Editors’ Picks

EUR/USD remains pressured after US data misses estimates

EUR/USD is trading closer to 1.1750, paring its recovery from earlier in the day as the safe-haven dollar is bid. US Consumer Sentiment missed estimates with 72 points in September. The financial woes of China's Evergrande are weighing on sentiment.


GBP/USD trades under 1.38 amid on UK data, dollar strength

GBP/USD is on the back foot, trading under 1.38 after UK Retail Sales figures disappointed with -0.9% in August, worse than expected. Brexit uncertainty and dollar demand weighed on the pair earlier. 


XAU/USD surrenders intraday gains, drops closer to $1,750 level

Gold struggled to preserve its intraday gains and dropped to the lower end of the daily trading range during the early North American session. 

Gold News

Experts say Ripple will win SEC lawsuit, which might propel XRP to new all-time highs

The latest development in the ongoing SEC vs. Ripple lawsuit is that documents are classified as privileged and blocked for public viewing. Though institutional investors are yet to take big bets on the altcoin in 2021, retail investors are actively trading in XRP.

Read more

US Michigan Consumer Sentiment Preview: Markets will have to look hard for positive signs

Consumer outlook expected to rebound to 72.2 in September. August’s 70.2 was the lowest since December 2011. Inflation and Delta variant wearing on US optimism. Markets face negative dollar risk from fading consumer optimism.

Read more