USD/CAD turns flat, around 1.3175 level amid a sharp pullback in oil prices

USD/CAD lacked any firm directional bias and remained confined in a range on Monday.
The USD remained depressed and capped the pair below the 1.3200 round-figure mark.
A turnaround in crude oil prices undermined the loonie and helped limit deeper losses.

Haresh Menghani FXStreet

The USD/CAD pair seesawed between tepid gains/minor losses through the early European session and was last seen trading in the neutral territory, around the 1.3175-70 region.

A combination of diverging forces failed to provide any meaningful impetus to the major, instead led to a subdued/range-bound price action on the first day of a new trading week. The prevalent selling bias surrounding the US dollar capped the upside, while a pullback in oil prices undermined the commodity-linked loonie and helped limit any deeper losses.

The USD remained depressed on the back of fading hopes for the next round of the US fiscal stimulus measures. Adding to this, a strong rally in the equity markets further undermined the greenback's relative safe-haven status. The global risk sentiment got a strong boost from renewed optimism over a potential vaccine for the highly contagious COVID-19.

It is worth reporting that AstraZeneca announced to resume the phase-3 trials for its coronavirus vaccine candidate. Adding to this, Pfizer also announced the likelihood of presenting late-stage data for its own vaccine by late October. Weaker USD exerted some pressure on the USD/CAD pair through the early part of the trading action on Monday.

However, a sharp intraday turnaround in crude oil prices, now down over 1% for the day, extended some support, rather assisted the USD/CAD pair to rebound around 20 pips from the vicinity of mid-1.3100s. Meanwhile, the uptick lacked any strong follow-through as investors now seemed reluctant to place any aggressive bets ahead of the upcoming FOMC meeting.

This makes it prudent to wait for some strong follow-through buying before positioning for any further appreciating move amid absent relevant market-moving economic releases, either from the US or Canada.

Technical levels to watch

USD/CAD

Overview
Today last price	1.3176
Today Daily Change	-0.0002
Today Daily Change %	-0.02
Today daily open	1.3178

Trends
Daily SMA20	1.3146
Daily SMA50	1.3317
Daily SMA100	1.3539
Daily SMA200	1.3521

Levels
Previous Daily High	1.3208
Previous Daily Low	1.3151
Previous Weekly High	1.326
Previous Weekly Low	1.3053
Previous Monthly High	1.3451
Previous Monthly Low	1.302
Daily Fibonacci 38.2%	1.3173
Daily Fibonacci 61.8%	1.3186
Daily Pivot Point S1	1.315
Daily Pivot Point S2	1.3122
Daily Pivot Point S3	1.3094
Daily Pivot Point R1	1.3207
Daily Pivot Point R2	1.3236
Daily Pivot Point R3	1.3264

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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