The USD/CAD pair is getting weaker. The oil rally seems to be supporting the Canadian dollar. West Texas Intermediate (WTI) crude, the North American oil benchmark, is trading 1.8% higher on the day near $46.40 per barrel. On Thursday, the OPEC+, a group of major producers led by Saudi Arabia and Russia, reached an agreement to add in 500,000 barrels per day in January to its oil production quotas. The total production cut in January will now be 7.2 million barrels per day (bpd) versus 7.7 million bpd as of now.

Asides from the oil rally, the broad-based US dollar weakness looks to be keeping the USD under lot of pressure. The sentiment around the dollar remains bearish on hopes for a quick global economic recovery on potential corona virus vaccines and expectations for additional fiscal stimulus.  The corona virus economic aid bill should be passed with signs of consensus growing around the $900 billion plan, President-elect Joen Biden told on wire.

Biden told “The $900 billion stimulus package is a “good start”.. After swearing in, I am going to have to ask for more to get things done.”

The US Government has reduced the maximum validity length of the B1/B2 non-immigrant business and tourist visas for China’s ruling Communist Party and their families in a bid to protect the nation from malign influence.

The US dollar is likely to remain on the offer at least for six months, having declined by 12% against majors this year,  a poll of currency strategists found. While 51 or 72 analysts called for a continued downtrend until mid-2021 on expectations for corona virus-vaccine led economic recovery and hopes for additional US fiscal stimulus, the remaining 21 said it would end before.

The narrative of potential corona virus vaccines leading to swift global economic recovery is currently dominating the market sentiment.

USD/CAD 4 Hour Chart:

Support: 1.2833 (S1), 1.2798 (S2), 1.2744 (S3).

Resistance: 1.2922 (R1), 1.2976 (R2), 1.3011 (R3).

In the prevailing atmosphere, a broad based US dollar weakness is expected to continue and we expect a bearish trend for USD/CAD.