USD/CAD breaks lower and reaches 1.3000 psychological support

The greenback has broken below the bottom of the last eight days’ trading range, at 1.3035/50 on Tuesday, to reach 1.3000 psychological level, with the Canadian dollar buoyed by the positive market mood and higher oil process.

US dollar dives on risk appetite, higher oil prices

The USD opened the day on a positive note and advanced towards the 1.3100 area, where the pair was rejected again. The nearly 5% rally on oil prices has boosted demand for the Canadian dollar, which has sent the USD to its lowest levels in two weeks.

Hopes about a COVID-19 vaccine to be rolled out early next year have eased concerns about the economic impact of the coronavirus lockdowns and have sent the price of the WTI barrel to levels beyond $45 for the first time since early March.

Beyond that, the investors have welcomed news about Trump’s endorsement to Joe Biden’s transition and the Democrat’s announcement of former Fed chair, Janet Yellen as the next Treasury secretary.

The higher US Treasury bond yields have eased negative pressure on the USD although the risk-sensitive Canadian dollar has prevailed, with the main equity indexes posting solid advances.

Technical levels to watch