- The pair is consolidating near the lowest point since October 2018.
- US Fed, Fiscal stimulus expected, weakens the greenback.
- Oil prices lift CAD, piles onto USD/CAD misery.
The USD/CAD trades near the lowest level since October 2018 and is now firmly in a bearish consolidation phase, oscillating in a range near mid-1.2800s.
The oversold levels in the pair lend some support, but the bounce was meek and faded around 1.2875.
The US dollar is trading near two-and-a-half-year low against major competitors as expectations of the Fiscal stimulus and Fed dovish actions stay in the top-of-the-mind of traders. The greenback’s safe-haven status also have less appeal now as the vaccine developments drive risk appetite across the globe.
Meanwhile, the loonie stayed bullish assisted by the oil price strength and further weighed on the USD/CAD. Crude oil prices flew up to new multi-month highs as oil majors agreed to cut production by 500,000 barrels a day from January 2021.
Traders eye the monthly employment details from the US and Canada due today before placing any aggressive bets on the pair. The US data will dictate, then its Canadian counterpart, the trading direction ahead.
At the time of writing, one US dollar buys 1.2861 Canadian dollars, slightly up 0.01% as of 10:55 AM UTC.