USD/CAD bounces from 3-week lows, keeps bearish bias

The US dollar erased losses against the Canadian dollar and recovered from 3-week lows. USD/CAD bottomed at 1.3570 at the beginning of the American session and currently is trading at 1.3615/20, slightly higher from yesterday’s closing price. 

The greenback was affected today amid the ongoing controversy of US President Trump and former FBI director. Wall Street is having the worst day in months. The Dow Jones is falling 1.50% and the Nasdaq slides 2.20%. US yields tumbled and gold prices soared. Despite risk aversion crude oil price rose modestly, approaching weekly highs. The WTI barrel is hovering around $49.00.

Technical outlook 

In the very short-term the pair is moving in a range, with the upside limited below 1.3650 and with support around 1.3580. The correction from 1.3795 remains intact and current price action could be seen as a consolidation from the latest decline. 

A confirmation below 1.3570 could open the doors for an extension of the correction to 1.3530 and then 1.3490. On the opposite direction, if USD/CAD rises above 1.3650 the bearish bias would be challenged. Above the next resistance is seen at 1.3700, followed then by the 1.3740 zone.