USD/CAD on the defensive below mid-1.4000s, downside remains limited
- USD/CAD failed to capitalize the attempted recovery move the 1.40 mark.
- Sustained USD buying, weaker oil prices helped limit any meaningful slide.
- Investors now look forward to the US ADP report for a fresh trading impetus.
The USD/CAD pair remained depressed through the early European session and was last seen trading near the lower end of its daily trading range, below mid-1.4000s.
The pair struggled to capitalize on its early uptick to the 1.4075-80 region, instead met with some fresh supply and for now, seems to have stalled the overnight attempted recovery move from the key 1.40 psychological mark.
However, a combination of factors, including some follow-through US dollar buying and a mildly softer tone around crude oil prices, assisted the pair to continue finding some support near 200-hour SMA, at least for now.
Despite the latest optimism over the re-opening of economies in some parts of the world, a US-China spat over the origin of the coronavirus continued benefitting the greenback's status as the global reserve currency.
Meanwhile, oil prices edged lower on Wednesday after higher-than-expected US inventories resurfaced worries about the risk of oversupply and undermined demand for the commodity-linked currency – the loonie.
It, however, remains to be seen if the pair is able to attract any meaningful buying interest or meets with some fresh supply at higher levels as the focus now shifts to the US private-sector employment details – the ADP report.
Technical levels to watch