USD/CAD sellers attack 1.2700 as WTI strength joins US dollar weakness

USD/CAD stays depressed while probing the weekly low.
WTI refreshes multi-week top, US dollar index extends the previous day’s losses.
Risks linger virus woes and US political turmoil battle stimulus hopes.
US CPI, Fedspeak to decorate calendar, risk headlines become the key.

Anil Panchal FXStreet

USD/CAD remains heavy near the intraday low of 1.2703, down 0.06% on a day, during Wednesday’s Asian session. The loonie pair dropped for the first time in the last four days on Tuesday, while also carrying the losses today, amid the broad US dollar weakness and gains in Canada’s main export item crude oil. It should be noted that the mixed clues to justify trading sentiment coupled be spotted for a bid milder downside bias.

Crude prices recently jumped to the fresh high since February 2020, currently up 0.90% at $53.65, after private oil inventories shrank more than the previous readings. Also favoring the commodity is the broadly risk-on mood and US dollar weakness.

Read: WTI refreshes multi-month high above $53.00 on upbeat API stockpile data, focus on EIA figures

On the contrary, the US dollar index (DXY) drops for the second day while marking a 0.08% intraday loss to 89.96. The greenback’s weakness could be attributed to the political drama in the US relating to President Donald Trump’s impeachment and President-elect Joe Biden’s hint of mammoth fiscal stimulus.

While roiling the mood, worsening coronavirus (COVID-19) conditions in the US, the UK and Europe, not to forget Japan and some parts of Asia, probe vaccination drives. That said, S&P 500 Futures and stocks in Asia-Pacific remain mildly bid but the US 10-year Treasury yields snap seven-day north-run.

Looking forward, risk catalysts to remain in the driver’s seat even as December’s Consumer Price Index (CPI) from the US can offer intermediate moves.

Technical analysis

A one-week-old support line near 1.2700 challenges USD/CAD bears targeting the monthly low around 1.2630. Meanwhile, 21-day SMA and a downward sloping trend line from December 21, respectively around 1.2770 and 1.2820, guard the pair’s short-term upside.

Additional important levels

Overview
Today last price	1.2707
Today Daily Change	-7 pips
Today Daily Change %	-0.06%
Today daily open	1.2714

Trends
Daily SMA20	1.2773
Daily SMA50	1.289
Daily SMA100	1.3048
Daily SMA200	1.3354

Levels
Previous Daily High	1.2792
Previous Daily Low	1.2711
Previous Weekly High	1.2798
Previous Weekly Low	1.263
Previous Monthly High	1.301
Previous Monthly Low	1.2688
Daily Fibonacci 38.2%	1.2742
Daily Fibonacci 61.8%	1.2761
Daily Pivot Point S1	1.2686
Daily Pivot Point S2	1.2658
Daily Pivot Point S3	1.2605
Daily Pivot Point R1	1.2766
Daily Pivot Point R2	1.2819
Daily Pivot Point R3	1.2847

Author

Anil Panchal

FXStreet

Anil Panchal has nearly 15 years of experience in tracking financial markets. With a keen interest in macroeconomics, Anil aptly tracks global news/updates and stays well-informed about the global financial moves and their implications.

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