The USD/CAD pair traded with a moderate bad bias via the early European session and was once final considered hovering close to the decrease quit of its each day range, nearer to mid-1.3000s.
The pair failed to capitalize on Friday’s goodish intray leap of round 60 pips, rather confronted rejection close to the 1.3100 mark and used to be being forced by way of a mixture of factors. The modern optimism over profitable coronavirus vaccine trials revived hopes for a healing in gas demand. Apart from this, expectations that OPEC+ will hold output in take a look at led to a modest uptick in crude oil prices. This, in turn, benefitted the commodity-linked foreign money – the loonie – and was once viewed as one of the key elements exerting some strain on the USD/CAD pair.
Meanwhile, the upbeat market temper undermined the safe-haven US dollar, which was once already weighed down by way of speculations for extra economic easing by means of the Fed. Investors appeared to have commenced pricing in the opportunity of such motion as quickly as the December assembly amid worries about the monetary fallout from the imposition of new COVID-19 restrictions in numerous US states. Hence, the key focal point will be on the launch of the contemporary FOMC assembly minutes, due on Wednesday, which will play a key function in riding the near-term sentiment surrounding the USD.
In the meantime, merchants would possibly take cues from Monday’s launch of the flash model of the US Manufacturing and Services PMIs. Apart from this, the broader market threat sentiment will impact the USD rate and produce some significant buying and selling possibilities round the USD/CAD pair.
From a technical perspective, some follow-through weak spot beneath the 1.3040-35 horizontal aid will be considered as a sparkling set off for bearish merchants and speed up the slide again in the direction of the key 1.3000 psychological mark. The USD/CAD pair would possibly then subsequently drop to take a look at month-to-month swing lows help close to the 1.2930-25 area.