USD/CAD takes offers to renew the day’s bottom level around 1.2650 as European traders brace for Thursday’s bell.
The loonie pair cheers the US dollar weakness, as well as mild gains of Canada’s main export item WTI crude oil, to print the third daily loss after reversing from the highest levels since September on Tuesday.
The US Dollar Index (DXY) drops 0.12% intraday to 96.73 at the latest, marking the first daily loss in five, not to forget reversing from the highest levels since July 2020. In doing so, the greenback gauge tracks sluggish inflation expectations that weighed on the US Treasury yields the previous day. The 10-year breakeven inflation rate per the St. Louis Federal Reserve (FRED) data, reversed Tuesday’s bounce off a three-week low on Wednesday to print a 2.61% level.
Elsewhere, WTI crude oil prices print mild gains above $78.00 amid concerns that the US-led push for releasing the Strategic Petroleum Reserves (SPR) will push the OPEC to cut the output targets. Also favoring the black gold are the latest comments from the United Arab Emirates (UAE) suggesting no favor for supply increase.
It’s worth noting that the Canadian Trade Minister Mary Ng conveyed dislike for the US duties on the lumber while saying, “We are extremely disappointed in the United States' decision to increase its unjustified duties on our softwood lumber. We will always stand up for the
Moving on, USD/CAD may remain sidelined amid the Thanksgiving Day holiday and a light calendar elsewhere. However, oil prices and chatters concerning US-Canada trade, as well as inflation, may direct short-term moves, mostly towards the south.
The Loonie pair confirmed a rising wedge bearish chart pattern the previous day and the downward sloping RSI, not oversold, added strength to the fall afterward. That said, the quote currently drops towards 50-SMA around 1.2620 but the early November highs near 1.2600 will challenge the bears afterward. Meanwhile, corrective pullback needs to cross the immediate resistance line from Tuesday, close to 1.2700, before recalling the USD/CAD bulls.
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