USD/CAD turns higher, approaching 1.4200

• USD/CAD pullback from 1.4237, contained at 1.4115.
• USD regains lost ground as the US Senate passes a new COVID-19 aid bill.
• FX experts: USD/CAD biased higher, accelerating above 1.4280.

The US dollar retreat from intra-day highs at 1.4237 has found support at 1.4115 on the early US session, and the dollar has trimmed losses, returning to 1.4180 so far.

The US Senate approves a new COVID-19 aid package and the USD picks up

The USD lost ground earlier today with the investors relieved by a rebound on oil prices, which has eased the aversion to risk witnessed at the beginning of the week. The recovery on oil prices has given some respite to the commodity-related CAD, pulling the pair back to 1.4115 despite the weak Canadian CPI reading.

The USD/CAD, however, has managed to regain lost ground during the US session, with the greenback favoured by the US Senate’s decision to pass a $484 billion aid bill to support small businesses and hospitals hit by the COVID -19 crisis.

USD/CAD upside trend, expected to accelerate above 1.4280

Mazen Issa Senior FX Strategist at TD securities remains bullish on the USD/CAD and observes the 1.4250/80 as an important trigger to accelerate the upside trend: “The muted behaviour in FX has not altered our bias on CAD. Many of the reasons we are bearish are outside the day-to-day purview. Nonetheless, we look for 1.4150 in USDCAD to be a pivot of support. The key threshold up there will be 1.4250/80 which has previously acted as a barrier. A break of this will see an accelerated topside move. We do not expect to get there today but it remains our focus.”

USD/CAD key levels to watch