USD/CAD recovers early lost ground, turns neutral around 1.3570 region
- USD/CAD attracted some dip-buying on Thursday amid a goodish pickup in the USD demand.
- Coronavirus jitters weighed on the global risk sentiment and benefitted the safe-haven USD.
- Positive crude oil prices underpinned the loonie and seemed to cap the upside for the major.
The USD/CAD pair managed to rebound around 50 pips from daily lows and was last seen trading in the neutral territory, around the 1.3570 region.
Concerns over a new wave of the coronavirus infections and geopolitical tensions in Asia continued taking its toll on the global risk sentiment. The risk-off mood was evident from a fresh leg down in the equity markets, which underpinned the US dollar's perceived safe-haven demand and was seen as one of the key factors behind the pair's intraday bounce.
The greenback maintained its mildly positive tone following the release of mixed US economic data. According to the US Department of Labor (DOL), 1.508 million American applied for unemployment-related benefits during the week ended June 13 as against 1.3 million expected. Separately, the Philly Fed Manufacturing Index jumped to 27.5 for June as against consensus estimates pointing to a rebound to -23 from -43.1 recorded in the previous month.
Meanwhile, a positive tone around crude oil prices continued lending some support to the commodity-linked currency – the loonie – and might keep a lid on any strong follow-through gains for the USD/CAD pair. This makes it prudent to wait for some strong follow-through buying beyond the very important 200-day SMA before traders start positioning for an extension of last week's goodish recovery move from three-month lows.
Technical levels to watch