USD/CAD drops to fresh weekly lows, further below 1.4200 mark amid notable USD supply
- Weaker oil prices undermined the loonie and provided some intraday boost to USD/CAD.
- Persistent USD selling kept a lid on any further gains, rather exerted some fresh pressure.
The USD/CAD pair failed to capitalize on its intraday positive move and has now retreated to the lower end of its daily trading range, back below the 1.4200 round-figure mark.
The pair managed to gain some intraday positive traction during the early part of Thursday trading action and was being supported by weaker oil prices, which tend to undermine demand for the commodity-linked currency – the loonie.
Oil prices slipped on Thursday, snapping three consecutive days of a positive move, amid concerns over shrinking demand on the back of the coronavirus-led travel bans. This eventually negated the latest optimism over the $2 trillion US stimulus package.
However, persistent selling bias surrounding the US dollar kept a lid on any further recovery. Against the backdrop of the Fed's unlimited QE, the greenback was further weighed down by a fresh leg down in the US Treasury bond yields.
The pair is currently placed near weekly lows and some follow-through weakness might be seen as a fresh trigger for bearish traders, which should set the stage for an extension of the recent sharp pullback from multi-year tops.
Moving ahead, market participants now look forward to the US economic docket, featuring the release of the highly anticipated initial weekly jobless claims and the final Q4 GDP growth figures, for some short-term trading opportunities.
Technical levels to watch