USD/CAD clings to modest gains above mid-1.4500s

• USD/CAD witnessed a modest pullback from multi-year tops amid profit-taking.
• Rebounding oil prices underpinned the loonie and prompted some long-unwinding.
• A sustained USD buying interest continues to lend support and helped limit the slide.

The USD/CAD pair had some good two-way price swings on Thursday and now seems to have stabilized with modest daily gains, just above mid-1.4500s.

The pair quickly reversed an early Asian session dip to the 1.4425 region and rallied to fresh multi-year tops, albeit struggled to capitalize on the momentum and witnessed some intraday profit-taking from the 1.4670 region.

A strong recovery in crude oil prices, following the recent slump to the lowest level in almost two decades, underpinned demand for the commodity-linked currency – the loonie and prompted some long-unwinding trade.

Meanwhile, the downside remained cushioned in the wake of a sustained US dollar buying interest – backed by worries over tightening liquidity conditions and mounting fears about the economic fallout from the coronavirus pandemic.

The pair, so far, has managed to hold above daily swing lows, making it prudent to wait for some strong follow-through weakness before confirming that a near-term top is already in place and positioning for a further corrective slide.

Technical levels to watch