USD/CAD flirts with weekly lows, around 1.3080-70 region

A combination of factors prompted some fresh selling around USD/CAD on Wednesday.
Concerns about surging COVID-19 cases in the US continued weighing on the greenback.
A modest uptick in oil prices underpinned the loonie ahead of Canadian inflation figures.

Haresh Menghani FXStreet

The intraday USD selling bias picked up pace during the early European session and dragged the USD/CAD pair to the lower end of its weekly range, around the 1.3070 region in the last hour.

The pair failed to capitalize on the previous day's positive move, instead witnessed some fresh selling on Wednesday and was being pressured by a weaker tone surrounding the US dollar. Despite the latest optimism around promising vaccine trials, investors remain concerns about the potential economic fallout from the imposition of new coronavirus restrictions in several US states. This, in turn, kept the USD bulls on the defensive and was seen as a key factor exerting pressure on the USD/CAD pair.

Apart from a weaker greenback, a modest pickup in crude oil prices underpinned the commodity-linked currency – the loonie – and further contributed to the USD/CAD pair's intraday slide. Oil prices remained well supported by hopes that OPEC and its allies will delay a planned rise in output. This helped offset fears over reduced fuel demand on the back of the continuous surge in new COVID-19 cases and the overnight API report, which showed that US crude stockpiles rose more-than-expected, by 4.2 million barrels last week.

Meanwhile, the downside remains cushioned, at least for the time being, as investors now look forward to the latest Canadian consumer inflation figures for a fresh impetus. The data is scheduled for release during the early North American session, which along with a scheduled speech by the Bank of Canada (BoC) senior deputy governor Carolyn Wilkins will influence the Canadian dollar. Traders might further take cues from second-tier US macro releases.

Wednesday's US economic docket features the release of housing market data – Building Permits and Housing Starts. Apart from this, developments surrounding the coronavirus saga and the broader market risk sentiment might further contribute to produce some short-term trading opportunities on Wednesday.

Technical levels to watch

USD/CAD

Overview
Today last price	1.3073
Today Daily Change	-0.0021
Today Daily Change %	-0.16
Today daily open	1.3094

Trends
Daily SMA20	1.3148
Daily SMA50	1.3202
Daily SMA100	1.3271
Daily SMA200	1.3536

Levels
Previous Daily High	1.3117
Previous Daily Low	1.3064
Previous Weekly High	1.3173
Previous Weekly Low	1.2928
Previous Monthly High	1.339
Previous Monthly Low	1.3081
Daily Fibonacci 38.2%	1.3096
Daily Fibonacci 61.8%	1.3084
Daily Pivot Point S1	1.3066
Daily Pivot Point S2	1.3039
Daily Pivot Point S3	1.3013
Daily Pivot Point R1	1.3119
Daily Pivot Point R2	1.3145
Daily Pivot Point R3	1.3172

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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