The USD/CAD pair was closed at 1.29183 after placing a high of 1.29584 and a low of 1.29098. The USD/CAD pair dropped for the second consecutive day on Wednesday towards its lowest since October 2018 amid the broad-based US dollar weakness and rising crude oil prices.
The US dollar was weak across the board on Wednesday as the hopes for further stimulus relief bill from Congress rose day by day and calls for its from top officials. The prospects of a renewed stimulus bill to support the US economy through the pandemic crisis weighed on the local currency US dollar and weighed on the USD/CAD pair.
After the vaccine development from various drug companies, the ongoing risk sentiment also added weight to the safe-haven greenback. The US dollar index plunged to its lowest in 30 months on Wednesday to 91.10 level and added pressure on the USD/CAD pair. Meanwhile, Pfizer and BioNtech received approval from the UK Administration on Wednesday and became the first to use their vaccine widely. This optimistic report added strength to the risk sentiment and weighed on the US dollar that dragged the currency pair USD/CAD on the two-year lower level.
Meanwhile, the WTI Crude oil prices raised on Wednesday to near $46 per barrel amid declining crude oil stockpiles from the US on the day and added strength in the commodity-linked currency Loonie ultimately added in the losses of USD/CAD pair.
Furthermore, on the data front, at 18:30 GMT, the Labor Productivity for the quarter from Canada came in as -10.3% against the forecasted -6.9% and supported the Canadian Dollar and added losses in USD/CAD pair. From the US front, at 18:15 GMT, the ADP Non-Farm Employment Change for November declined to 307K against the expected 433K and weighed on the US dollar and added losses in the USD/CAD pair.
Daily Technical Levels
Pivot point: 1.2955
On the technical side, the commodity currency pair USD/CAD is trading with a selling bias at the 1.2939 level, having crossed below the 1.2939 support level, which is now anticipated to work as a resistance. On the 4 hour timeframe, the USD/CAD has produced a downward channel, which supports the selling bias in the Loonie. Closing of candles below the 1.2945 level may assist us catch a quick selling trade. Good luck!