- USD/CAD gained some strong positive traction and rallied to one-week tops on Thursday.
- The downbeat market mood benefitted the safe-haven USD and remained supportive.
- A steep fall in crude oil prices undermined the loonie and provided an additional boost.
The USD/CAD pair continued scaling higher through the early North American session and shot to fresh one-week tops, around the 1.3235 region in the last hour.
A combination of supporting factors prompted some aggressive short-covering move on Thursday and assisted the USD/CAD pair to move away from over one-month lows, around the 1.3100 mark touched earlier this week.
Against the backdrop of a rapid rise in new coronavirus cases, the impasse over the next round of the US fiscal stimulus measures took its toll on the global risk sentiment. This, in turn, benefitted the US dollar's safe-haven status.
The USD bulls seemed rather unaffected by the disappointing release of the Empire State Manufacturing Index and the Initial Weekly Jobless Claims, instead took cues from the upbeat release of the Philly Fed Manufacturing Index.
On the other hand, a steep fall in crude oil prices – now down over 3.5% for the day – undermined the commodity-linked currency – the loonie – and provided an additional boost to the USD/CAD pair.
The strong intraday positive move took along some short-term trading stops placed near the 1.3165 horizontal level. A subsequent move beyond the 1.3200 round-figure mark further contributed to the latest leg of a sudden spike over the past hour or so.
The incoming headlines over the US fiscal stimulus measures will influence the USD price dynamics and produce some trading opportunities. Hence, it remains to be seen if the USD/CAD pair is able to capitalize on the move or meets with some fresh supply at higher levels.
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
GBP/USD bulls retain control near 1.3300 mark, highest since March 2022
The GBP/USD pair trades with a positive bias for the third straight day on Friday and hovers around the 1.3300 mark during the Asian session, just below its highest level since March 2022 touched the previous day.
USD/JPY pops and drops on BoJ's expected hold
USD/JPY reverses a knee-jerk spike to 142.80 and returns to the red below 142.50 after the Bank of Japan announced on Friday that it maintained the short-term rate target in the range of 0.15%-0.25%, as widely expected. Governor Ueda's press conference is next in focus.
Gold consolidates weekly gains, with sight on $2,600 and beyond
Gold price is looking to build on the previous day’s rebound early Friday, consolidating weekly gains amid the overnight weakness in the US Dollar alongside the US Treasury bond yields. Traders now await the speeches from US Federal Reserve monetary policymakers for fresh hints on the central bank’s path forward on interest rates.
Shiba Inu is poised for a rally as price action and on-chain metrics signal bullish momentum
Shiba Inu remains strong on Friday after breaking above a symmetrical triangle pattern on Thursday. This breakout signals bullish momentum, further bolstered by a rise in daily new transactions that suggests a potential rally in the coming days.
Bank of Japan set to keep rates on hold after July’s hike shocked markets
The Bank of Japan is expected to keep its short-term interest rate target between 0.15% and 0.25% on Friday, following the conclusion of its two-day monetary policy review. The decision is set to be announced during the early Asian session.
Moneta Markets review 2024: All you need to know
VERIFIED In this review, the FXStreet team provides an independent and thorough analysis based on direct testing and real experiences with Moneta Markets – an excellent broker for novice to intermediate forex traders who want to broaden their knowledge base.