USD/CAD faces double whammy amid weaker USD, WTI rally, attacks 1.3100

• USD/CAD flirts with three-day lows near 1.3100.
• US dollar softens on vaccine, trade deal optimism.
• WTI rallies on risk-on mood, boosting the loonie.

USD/CAD extends its corrective declines from six-day tops into the third consecutive day this Monday, as the bulls face a double whammy as they defend the 1.3100 support.

The US dollar drops across the board, as the positive developments in the coronavirus vaccine trials globally and a trade deal reached between 15 Asia-pacific nations boost the market mood.

The optimism offsets concern over the record rise in virus cases and stricter restrictions announced in the US, thereby, weighing on the safe-harbor US dollar. The US dollar index sheds 0.20% on daily basis, last seen trading at 92.57.

Another hit to the major comes from the rally in WTI prices, which helps buoy the sentiment around the resource-linked loonie. The US oil rises nearly 1.50% in Asia, as markets remain hopeful that the OPEC and its allies (OPEC+) will extend its oil output cuts, which douse mounting oil demand concerns amid the pandemic.

Looking ahead, the broader market sentiment and the US dollar dynamics will continue to have a significant influence on the spot, as the economic calendar remains light in both the North American nations.

USD/CAD technical levels

“Of more immediate effect was the close on Monday at 1.3013, just above support at 1.3000 and Tuesday's rebound from the same level. The Wednesday close and Thursday open at the 1.3065 marked a resistance to support switch. There has been a good deal of back and forth for the last three months in the area immediate above the Friday close at 1.3143 with two weak resistance lines at 1.3175 and 1.3200 before a more substantial impediment at 1.3230, Joseph Trevisani, FXStreet’s Senior Analyst explained.

USD/CAD additional levels