USD/CAD rallies back to 1.4200 neighbourhood amid broad based USD strength
- USD/CAD caught some aggressive bids and built on the overnight bounce from 1.40 mark.
- A goodish pickup in the USD demand turned out to be a key factor driving the pair higher.
- A subdued action around the oil markets did little to influence the commodity-linked loonie.
The USD/CAD pair climbed to fresh daily tops in the last hour, with bulls now eyeing a move towards reclaiming the 1.4200 round-figure mark.
Following the previous session's sharp intraday pullback of nearly 350 pips and a late bounce from the key 1.40 psychological mark, the pair caught some fresh bids on Wednesday and was being supported by a goodish pickup in the US dollar demand.
Investors remained concerns that the ever-increasing coronavirus cases and broader lockdowns across the world will take its toll on the global economy. This buoyed the USD's status as the global reserve currency and assisted the pair to regain positive traction.
Meanwhile, a subdued oil price dynamics did little to provide any meaningful impetus to the commodity-linked currency – the loonie – or influence the pair's intraday momentum through the early European session on Wednesday.
It will now be interesting to see if the pair is able to capitalize on the move or runs into some fresh supply at higher levels. Later during the early North-American session, the release of the US ISM Manufacturing PMI will be looked upon for some short-term trading opportunities.
Technical levels to watch
Author
Haresh Menghani
FXStreet
Haresh Menghani is a detail-oriented professional with 10+ years of extensive experience in analysing the global financial markets.
