USD/CAD rises to 7-week highs, settles comfortably above 1.3200

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USD/CAD rises to 7-week highs, settles comfortably above 1.3200

  • USD/CAD pair added USD/CAD to its recent gains and rose to new highs in several weeks.
  • The continued decline in oil has undermined the Canadian dollar and it remains supportive.
  • Investors are now looking to the US fourth-quarter GDP growth numbers for a fresh boost.

Brown USD/CAD pair USD/CAD on its momentum after the revolving 1.3200 mark and climbed to new highs in seven weeks during the early European session on Thursday.

A combination of factors helped the pair capitalize on the recent positive momentum and gain some follow-through momentum for the second consecutive session on Thursday - also its fourth day of positive action in the previous five days.

Bulls remain in control amid weak oil prices

Concerns about the economic impact of the deadly coronavirus led to a new wave of global risk-aversion trading on Thursday. The flight to safety, along with signs of a strengthening economy, continued to support the US dollar.

On the other hand, the ongoing decline in crude oil prices, which is now down 1.5% for the day on the back of a larger-than-expected increase in US inventories, has undermined demand for the commodity-linked currency – the Canadian dollar – and has remained supportive.

The pair is currently floating around the 1.3220-25 region, and has now approached the important 200-day SMA, above which the bulls are likely to take advantage of near-term control and may want to return towards reclaiming the 1.3300 handle.

Going forward, Thursday's US economic docket - which highlights the release of advanced Q4 GDP growth numbers - will now be looked at for some useful trading opportunities later during the early North American session.

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