USD/CAD on track to post highest daily close in a month near 1.3350

The USD/CAD pair advanced to its highest level in a month at 1.3389 on Thursday but erased a portion of its daily gains during the American trading ho  |  29/10/2020 17:14
  • USD/CAD looks to close second straight day in the positive territory.
  • US Dollar Index renewed monthly highs above 94.00.
  • WTI trades deep in the red near $36.

The USD/CAD pair advanced to its highest level in a month at 1.3389 on Thursday but erased a portion of its daily gains during the American trading hours. As of writing, the pair was up 0.23% on a daily basis at 1.3352. Despite this retreat, however, USD/CAD remains on track to post its highest daily close since September 29th. 

Oil selloff continues

The broad-based USD strength and the heavy selling pressure surrounding crude oil provided a boost to USD/CAD for the second straight day on Thursday.

Pressured by the concerns over the negative impact of the surging number of coronavirus cases globally causing an uneven recovery in energy demand, the barrel of West Texas Intermediate (WTI) dropped to a multi-month low of $34.91. At the moment, the WTI is down 3.83% on the day at $35.92.

On the other hand, the poor performance of major European currencies, especially the EUR, helped the greenback continue to gather strength. The US Dollar Index, which closed the first three days of the week in the positive territory, is currently trading at fresh October highs at 94.07, up 0.68% on the day. However, the CAD also seems to have taken advantage of the EUR selloff with the EUR/CAD pair looking to close the day 0.5% lower.

Earlier in the day, the data published by the US Bureau of Economic Analysis revealed that the real GDP in the US grew by 33.1% (advance estimate) on a yearly basis in the third quarter. Although this reading helped market sentiment improve, the USD didn't have a difficult time preserving its strength.

Technical levels to watch for

 

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