USD/CAD falls to four-week lows amid risk appetite under 1.2550
- US dollar drops across the board stocks rise sharply.
- WTI rebounds toward $78.00, now up 0.70%.
- USD/CAD heads for lowest close in a month ahead of key employment data.
The USD/CAD broke below 1.2560 and fell to 1.2540, reaching the lowest level since September 7. It remains near the lows with a bearish intraday bias, favored by a weaker dollar and higher crude oil prices.
In Wall Street, the Dow Jones gains 1.40% and the Nasdaq 1.59%. The improvement in market sentiment weighs on the US dollar. The retreat in energy prices in Europe and the deal between Democrats and Republicans in the US Congress regarding the bet ceiling contribute to the positive tone across financial markets.
Economic data also helped to boost equities. US initial jobless claims fell more than expected to 328K. In Canada, the Ivey PMI rose unexpectedly in September to 70.4 from 66. On Friday, critical economic data is due in the US and Canada with their employment reports.
Another factor keeping USD/CAD under pressure on Thursday is crude oil. The WTI rebounded sharply from under $75.00 to the $78.00; it is up 0.72%.
From a technical perspective, the bearish bias will likely remain strong while USD/CAD holds under 1.2560. At 1.2510 the 200-day moving average emerges and then at 1.2490, the September low. A recovery back above 1.2600 should alleviate the pressure.
Technical levels