USD/CAD slips below 1.4400, takes clues from US dollar weakness, WTI recovery
- USD/CAD remains on the back foot for the second day in a row.
- Broad US dollar weakness, WTI recovery weigh on the pair.
- US data, COVID-19 Bill, become the key catalysts to follow.
USD/CAD aptly portrays the broad US dollar weakness, a contrast to the WTI recovery, while declining to 1.4390, down 0.52%, during the pre-Europe session on Wednesday.
Increased calls of the US Senators near to agreeing on the much-awaited coronavirus (COVID-19) aid package seems to have dragged the US dollar off-late. Also negatively affecting the greenback’s demand were the Fed’s unlimited Quantitative Easing (QE) and a ray of hope from Italy after the latest virus numbers show fading strength of pandemic.
On the other hand, WTI extends the recovery gains as China, the main customer for oil, started flashing positive signals concerning the economy after the disease seem to have abated recently. Also supporting the energy benchmark were the latest inventory numbers, -1.25M versus -0.421M prior, from the private provider American Petroleum Institute (API).
Market’s risk tone also remains positive with the US 10-year treasury yields near 0.83% whereas most Asian stocks flash gains by the press time.
While details of the Senate voting on the COVID-19 Bill, as well as the US Durable Goods Orders for January, will be the key for traders, virus news is not likely to lose their importance as the key catalyst.
Technical Analysis
10-day SMA near 1.4270 acts as the near-term important support while buyers will seek entries beyond 1.4550.