USD/CAD drops to session lows, around mid-1.3500s amid fresh USD selling

A combination of factors led to the USD/CAD pair’s intraday pullback from weekly tops.
The USD failed to attract haven flows despite concerns about rising COVID-19 cases.
A modest uptick in oil prices underpinned the loonie and added to the selling bias.

Haresh Menghani FXStreet

The USD/CAD pair extended its steady intraday pullback from weekly tops and continued losing ground through the early North American session. The pair was last seen trading near the lower end of its daily trading range, around the 1.3555 region.

Following an early uptick to the 1.3625 region, the pair met with some fresh supply and has now eroded a major part of the previous day's strong positive move of around 85 pips. The downfall was sponsored by a combination of factors, including the emergence of some fresh selling around the US dollar and a modest uptick in crude oil prices.

The greenback struggled to preserve the overnight gains and remained on the defensive through the major part of trading action on Wednesday. Despite worries about the continuous rise in the number of coronavirus cases, a modest recovery in the US equity markets turned out to be one of the key factors that dented the USD's safe-haven status.

On the other hand, the commodity-linked currency – the loonie – benefitted from stable crude oil prices. Oil traders refrained from placing any aggressive bets, rather preferred to stay away ahead of the EIA crude stock data, due later this Wednesday. Nevertheless, a mildly positive tone surrounding oil prices contributed to the USD/CAD pair's slide.

It will now be interesting to see if the pair can attract any buying at lower levels or continues with its intraday bearish trend amid absent relevant market-moving economic releases, either from the US or Canada. A convincing break below the 1.3525-20 strong support will now set the stage for an extension of the recent downfall witnessed over the past two weeks or so.

Technical levels to watch

USD/CAD

Overview
Today last price	1.3553
Today Daily Change	-0.0050
Today Daily Change %	-0.37
Today daily open	1.3603

Trends
Daily SMA20	1.3583
Daily SMA50	1.3744
Daily SMA100	1.3818
Daily SMA200	1.3499

Levels
Previous Daily High	1.361
Previous Daily Low	1.3525
Previous Weekly High	1.3705
Previous Weekly Low	1.3545
Previous Monthly High	1.3802
Previous Monthly Low	1.3316
Daily Fibonacci 38.2%	1.3577
Daily Fibonacci 61.8%	1.3557
Daily Pivot Point S1	1.3549
Daily Pivot Point S2	1.3494
Daily Pivot Point S3	1.3464
Daily Pivot Point R1	1.3634
Daily Pivot Point R2	1.3664
Daily Pivot Point R3	1.3719

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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