USD/CAD struggles near 2-1/2 month lows, just above mid-1.3700s

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The USD/CAD pair traded with a mild negative bias through the early European session, with bears flirting with 2-1/2-month lows, just above mid-1.3700s.

The pair failed to capitalize on the early attempted recovery move, instead met with some fresh supply near the 1.3800 mark and drifted into the negative territory for the third consecutive session. The downtick seemed rather unaffected by a goodish pickup in the US dollar demand and a modest pullback in crude oil prices.

The greenback was back in demand amid worsening US-China relations, which overshadowed the latest optimism over a potential COVID-19 vaccine. Tensions between the world's two largest economies escalated after the US President Donald Trump promised a strong reaction to China's planned national security law for Hong Kong.

China was quick to retaliate and threatened countermeasures against any US actions, which revived worries over the fragile demand recovery for oil. This was evident from a weaker tone surrounding crude oil prices, which tends to undermine the commodity-linked loonie, albeit failed to provide any respite to the USD/CAD bulls.

The pair's inability to gain any meaningful traction – despite a combination of supporting factors – clearly suggests that the near-term bearish pressure might still be far from being over. Hence, some follow-through weakness, towards testing 100-day SMA support near the 1.3700 mark, now looks a distinct possibility.

There isn't any major market-moving economic data due for release on Wednesday, either from the US or Canada. Hence, the broader market risk sentiment, along with the USD/oil price dynamics will be looked upon to grab some meaningful trading opportunities.

Technical levels to watch

USD/CAD

Overview
Today last price1.3761
Today Daily Change-0.0016
Today Daily Change %-0.12
Today daily open1.3777

 

Trends
Daily SMA201.3997
Daily SMA501.408
Daily SMA1001.3698
Daily SMA2001.3451

 

Levels
Previous Daily High1.3986
Previous Daily Low1.3757
Previous Weekly High1.4114
Previous Weekly Low1.3867
Previous Monthly High1.4299
Previous Monthly Low1.385
Daily Fibonacci 38.2%1.3845
Daily Fibonacci 61.8%1.3899
Daily Pivot Point S11.3694
Daily Pivot Point S21.3611
Daily Pivot Point S31.3466
Daily Pivot Point R11.3923
Daily Pivot Point R21.4069
Daily Pivot Point R31.4152