- USD/CAD edged higher on Friday and recovered further from weekly lows.
- Resurgent USD demand was seen as a key factor supportive of the uptick.
- Positive oil prices underpinned the loonie and might cap gains for the pair.
The USD/CAD pair was last seen trading near the top end of its daily trading range, with bulls looking to extend the momentum beyond the 1.4100 round-figure mark.
The pair caught some fresh bids on the last trading day of the week and built on the overnight bounce from the key 1.40 psychological mark, or weekly lows. The pair, for now, seems to have snapped two-days of losing streak and the uptick was supported by resurgent US dollar demand.
As investors looked past Thursday’s yet another disastrous US Initial Weekly Jobless Claims report, the greenback managed to regain some positive traction on reports that Gilead Sciences’ antiviral drug remdesivier had failed to help severely ill COVID-19 patients in its first clinical trial.
This comes amid persistent uncertainty over the severity of the economic damage from the coronavirus pandemic, which benefitted the USD’s status as the global reserve currency. Adding to this, the prevailing cautious mood further boosted the greenback’s perceived safe-haven demand.
On the other hand, the commodity-linked currency – the loonie – was underpinned by some strong follow-through recovery in crude oil prices, which added to the overnight gains that came after producers such as Kuwait said they would move to cut output.
However, concerns about unprecedented demand destruction caused by the coronavirus-induced lockdowns across the world might keep a lid on any further positive move in oil prices. This supports prospects for an extension of the pair’s intraday positive move.
Moving ahead, market participants now look forward to the release of the US Durable Goods Orders, which might influence the USD price dynamics and produce some meaningful trading opportunities later during the early North American session.
Technical levels to watch