USD/CAD jumps to fresh session tops, around mid-1.3300s amid sliding oil prices

The USD/CAD pair recovered around 45-50 pips from Asian session lows and was last seen trading near the top end of its daily range, just below mid-1.3300s.

Following the previous day's good two-way price swings and an early downtick to sub-1.3300 levels, the pair managed to attract some fresh buying on the last trading day of the week. The uptick was exclusively sponsored by a fresh leg down in crude oil prices, which tend to undermine demand for the commodity-linked currency – the loonie.

Oil struggled to capitalize on its attempted recovery move and fell around 1.5%, back closer to multi-month lows amid concerns that the ever-increasing COVID-19 cases could hurt fuel consumption. Adding to this, the return of Libyan production and expectations that OPEC+ will raise their output in January further weighed on the commodity.

Apart from this, a steep decline in the US equity markets extended some support to the US dollar's safe-haven status and further contributed to the bid tone surrounding the USD/CAD pair. However, the uncertainty about the actual outcome of the US presidential election next week might hold the USD bulls from placing aggressive bets.

Nevertheless, the USD/CAD pair might still aim to surpass the overnight swing highs and reclaim the 1.3400 mark before eventually darting towards the 1.3415-20 supply zone. Moving ahead, market participants now look forward to the release of the Canadian GDP report, which, along with the US macro releases might produce some short-term trading opportunities.

Technical levels to watch