• USD/CAD consolidates recent losses around one-week low, picks up bids of late.
  • Market sentiment dwindles after initial risk-on mood, WTI crude oil struggles around two-week top.
  • Omicron updates, US stimulus news to join November’s US Durable Goods Orders, PCE Inflation fresh impulse.

USD/CAD licks its wounds around 1.2850, after a two-day pullback from the yearly top. In doing so, the Loonie pair rise 0.12% intraday during Thursday’s Asian session.

The quote’s previous declines could be linked to the firmer prices of Canada’s main export item WTI crude oil, as well as risk-on mood. However, the latest challenges to the sentiment seem to have favored the USD/CAD consolidation.

That said, the WTI crude oil seesaws around $73.00 after rising in the last two days to refresh a fortnight peak.

After an initial optimism over the drug discovery and approval concerning the cure of Omicron, White raised doubts over the availability of the cheered medicines, per Financial Times (FT), which in turn questions the optimists. On the same line was the FT news saying, “France on Wednesday canceled its order of Merck’s drug after data showed it resulted in a reduction of only 30% in the risk of hospitalization and death, significantly lower than earlier expectations.”

On Wednesday, the US US Army conveyed positive updates for a single vaccine to battle covid and all variants while the US Food and Drug Administration (FDA) approved a pill from Pfizer to treat Covid-19.

Additionally favoring the risk-on mood was Reuters news that quoted White House spokeswoman Jen Psaki while saying, “We believe that Senator Manchin has been engaging with us over the course of time and months in good faith.” It’s worth noting that Joe Manchin poured cold water on the face of stimulus expectations by being the only Democrat to oppose the much-awaited aid package that needs all the party members’ support to get through the house.

Given the firmer oil prices and risk-on mood, USD/CAD paid a little heed to the firmer US data. The US Q3 GDP rose past the 2.1% forecast to 2.3% whereas the CB Consumer Confidence for December came in better than upwardly revised 111.9 prior to 115.8.

It’s worth noting that the S&P 500 Futures struggle to copy the Wall Street’s gains while the US 10-year Treasury yields seesaw around 1.457% after declining for the first time in three days on Wednesday.

Looking forward, the monthly reading of Canadian GDP for November, expected 0.8% versus 0.1% prior, may entertain USD/CAD traders. Also important are the US PCE inflation and Durable Goods Orders for November. Above all, Omicron updates and oil prices moves will be critical to follow for clear direction.

Technical analysis

Despite the latest corrective pullback, USD/CAD prices stay below the 21-DMA and previous support line from December 08, respectively around 1.2850 and 1.2870. The same joins downbeat MACD and RSI signals to favor sellers.

This article was originally published by Fxstreet.com.Read the original article here.


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