USD/CAD recovers around 60 pips from session lows, back near mid-1.4100s

• USD/CAD retreated around 180 pips from daily tops; seemed resilient below 1.4100 mark.
• A goodish bounce in oil prices underpinned the loonie and exerted some heavy pressure.
• Coronavirus crisis might continue to lend support to the USD and help limit deeper losses.

The USD/CAD pair tumbled to fresh session lows, around the 1.4080 region in the last hour, albeit quickly recovered few pips thereafter.

The pair failed to capitalize on its early uptick, rather met with some aggressive selling pressure and retreated around 180 pips from the Asian session swing highs to levels just above mid-1.4200s.

A weekly bearish gap opening for oil prices undermined demand for the commodity-linked currency – the loonie – and turned out to be a key factor behind the pair's modest intraday positive move.

Oil prices drifted lower at the start of a new trading week in reaction to the news that Saudi Arabia and Russia delayed an emergency meeting to discuss output cuts, amid a deepening global supply glut.

Meanwhile, a goodish intraday bounce in oil prices, combined with a subdued US dollar price action prompted some aggressive selling around the major and led to a sharp intraday pullback.

Despite a strong pickup in the US Treasury bond yields, the greenback struggled to gain any meaningful traction, instead was being weighed down by a solid recovery in the global risk sentiment.

However, persistent worries over the economic fallout from the coronavirus pandemic might continue to lend some support to the USD's status as the global reserve currency and help limit the downside.

This coupled with the fact that the pair remains well within a broader trading range held over the past two weeks or so further warrant some caution before placing any aggressive bearish bets.

Technical levels to watch