USD/CAD slides to fresh multi-week lows, approaching 1.3400 mark

Increasing selling pressure around the greenback pushed the USD/CAD pair to fresh six-week lows, around the 1.3425 region ahead of the US opening on Wednesday.

The pair failed to capitalize on its intraday uptick, instead met with some fresh supply near the 1.3485 region and drifted into the negative territory for the third consecutive session. The downfall was exclusively sponsored by the sustained US dollar selling and seemed rather unaffected by a weaker tone surrounding crude oil prices, which tend to undermine the commodity-linked currency – the loonie.

The USD remained under some selling pressure amid growing market worries that the ever-increasing coronavirus cases could delay the US economic recovery. This coupled with the impasse over the next round of the US fiscal stimulus measures failed to impress the USD bulls. It is worth reporting that Republicans and Democrats have been struggling to reach consensus on a $3 trillion relief bill.

Meanwhile, oil prices pulled back from four-month hits set on Tuesday after a report showed that the US stockpiles rose more than expected. Moreover, rising US-China tensions also caused some headwinds for crude, albeit did little to lend any support to the USD/CAD pair. The more closely government data on supplies from the Energy Information Administration (EIA) will be released Wednesday.

Apart from this, developments surrounding the US stimulus package will play a key role in influence the USD price dynamics and produce some meaningful trading opportunities.

Technical levels to watch