The USD/CAD extended its early-day losses and drew further offers well below the 1.3300 level, mainly due to the weakness of the broad-based US dollar, which was triggered by the market risk-on sentiment. However, the market trading sentiment was supported by the positive news over US President Donald Trump’s recovery from a COVID-19 infection. This, in turn, undermined the US dollar and contributed to the losses in the currency pair.

On the other hand, the sharp declines in the currency pair could also be attributed to the fresh gains in the crude oil prices, which underpinned the commodity-linked currency, the Loonie, and contributed to the currency pair’s losses. At the time of writing, the USD/CAD currency pair was trading at 1.3281, and consolidating in the range between 1.3270 and 1.3303.

Despite the fears of fresh lockdown restrictions in the UK and Europe, the global market sentiment remained well supported by optimism over US President Donald Trump’s recovery from the coronavirus. As per the latest report, Trump and his wife are recovering from the virus infection. Considering their improved condition, Mr Trump’s doctors said that he and his wife could be discharged from the hospital as early as Monday. This positive news instantly gave a boost to the market trading sentiment and undermined the safe-haven US dollar.

On the USD front, the broad-based US dollar remains depressed, as investors continue to sell US dollars, in the wake of the low safe-haven demand in the market. On the other hand, the reason for the losses in the US dollar could also be associated with the mixed US data released on Friday, which raised fears over the recovery of the US economy. The losses in the greenback kept the currency pair lower. Meanshile, by 10:12 PM ET (2:12 AM GMT), the US Dollar Index Futures, which tracks the greenback against a basket of other currencies, had dropped by 0.13%, to 93.787.

On the crude oil front, WTI Crude Oil prices took fresh bids above $ 38 on the day, backed by the weakness of the broad-based US dollar. Furthermore, the gains in crude oil were further supported by reports that show an escalation in the workers’ strike in Norway, which could reduce the country’s production capacity. Thus, the uptick in crude oil prices underpinned the Loonie, a commodity-linked currency, and exerted some downside pressure on the currency pair. Looking forward, market traders are keeping their eyes on the news concerning the health of the American President. Apart from that, the US ISM Services PMI for September, which are expected to come in at 56.0, will be key to watch. In the meantime, the updates surrounding the fresh Sino-US tussle, coupled with the latest news on the coronavirus (COVID-19), have not lost any significance.

Daily Support and Resistance

S1 1.3233

S2 1.3272

S3 1.3292

Pivot Point 1.3312

R1 1.3331

R2 1.3351

R3 1.339

The USD/CAD is trading with a neutral bias, at around the 1.3270 level, holding over an immediate support level of 1.3265. Closing of doji candles over the 1.3265 level may either drive a bullish trend until the 1.3300 level, or a bearish breakout at the 1.3265 level could drive the selling trend until the 1.3235 level. The MACD is also in support of the selling trend today, therefore, we should consider selling below the 1.3270 level. Good luck!