USD/CAD bounces off weekly lows, still in the red below 1.4400 mark

• USD/CAD comes under some renewed selling pressure on Wednesday amid weaker USD.
• Recovering oil prices underpinned the loonie and further collaborated to the pair’s slide.
• Market participants now look forward to the US Durable Goods Orders for a fresh impetus.

The USD/CAD pair dropped to fresh weekly lows, around the 1.4335 region in the last hour, albeit recovered few pips thereafter.

The pair failed to capitalize on the previous day's intraday bounce and continued with its struggle to capitalize on the move beyond the key 1.4500 psychological mark amid broad-based US dollar weakness.

The Fed's unprecedented QE program to buy unlimited amounts of Treasury bonds and mortgage-backed securities helped ease concerns over tightening liquidity and continued weighing on the greenback.

This coupled with the fact that the US Senate finally reached an agreement on a stimulus package to offset any negative impact on the US economy from the coronavirus pandemic added to the latest optimism.

The latest developments boosted investors' confidence and the same was evident from some follow-through positive move in the equity markets, pointing to a further recovery in the global risk sentiment.

The risk-on flow allowed oil prices to build on the overnight strong gains, which underpinned demand for the commodity-linked currency – the loonie and collaborated to the pair's weaker tone on Wednesday.

However, mounting fears over an imminent global recession might cap any strong gains for oil prices and benefit the greenback's status as the global reserve currency, which should help limit the downside for the major.

Moving ahead, market participants now look forward to the release of the US Durable Goods Orders data in order to grab some trading opportunities later during the early North-American session.

Technical levels to watch