Ella 
The USD/CAD pair is facing selling pressure for the fifth day in a row and is weighed down by a variety of factors. Spot prices were trading around 1.3725 in early European trade, just above the near three-week low hit on Wednesday.
Crude oil prices rose for a third day in a row and were on track for a weekly gain of more than 3% as demand worries eased and worries about a broadening conflict in the Middle East. This in turn supported the commodity-linked Canadian dollar, which, coupled with the emergence of some US dollar (USD) selling, acted as a headwind for the US dollar/Canadian dollar (USD/CAD) pair.
The U.S. dollar index (DXY), which tracks the greenback against a basket of currencies, retreated further from the weekly top hit on Thursday as U.S. Treasury yields posted a fresh decline amid bets that the Federal Reserve will ramp up interest rate cuts. In addition, the generally positive tone of global stock markets has further weakened the demand for the safe-haven currency US dollar.
The above fundamental backdrop suggests the USD/CAD pair has minimal downside resistance, although traders may prefer to wait for Canada’s monthly employment data before placing new bets. The key jobs report will influence Canadian dollar (CAD) trends and provide some meaningful impetus to the USD/CAD pair.
In addition to this, the US dollar and oil price dynamics on the last day of the week will also help generate short-term trading opportunities. Market focus will then turn to the latest U.S. consumer inflation data due next Wednesday, which will play a key role in determining the Fed’s future policy decisions and drive demand for the dollar in the short term.
