Amid quarter-end flows and what not yesterday, the pair had a wild session as price moved above 1.4300 only to come crashing down back towards the 1.4000 level.
But as we get the session going, softer oil prices and a more perky dollar is helping to underpin the pair back above 1.4200 and looking towards testing the 200-hour MA (blue line) @ 1.4244 next. Currently, the pair is up by over 1% on the day.
The upside move yesterday also stalled at a near-term trendline resistance and that sits around the 1.4300 level currently so watch out for that in case as well.
Adam pointed out some reasons for why the loonie is seen as holding its ground in trading yesterday but amid the dollar starting to come back in favour, I reckon USD/CAD may have potential to run much higher once it cracks the key near-term levels above.
The fundamentals there may be helpful for the loonie in the medium-term but the immediate focus of the market remains on virus fears and the flows related to it. If dollar liquidity is going to be an issue, it will override the fundamentals as long that persists.