USD/CAD quickly retreats over 100-pips from daily tops, back below mid-1.4100s

• USD/CAD failed to capitalize on the early strong gains to the 1.4270 region.
• Bulls shrugged off a strong pickup in the USD demand, weaker oil prices.
• Concerns over increasing coronavirus cases in the US seemed to cap gains.

The USD/CAD pair trimmed a part of its daily gains and quickly retreated over 100 pips during the early North-American session.

The pair stalled its strong intraday positive momentum and witnessed a dramatic turnaround from 200-hour SMA resistance near the 1.4270 region. The pullback shrugged off a combination of supporting factors, including a strong bid tone surrounding the US dollar and weaker crude oil prices.

As investors looked past the Fed's latest move to allow foreign central banks to temporarily exchange their holdings of the US Treasuries for overnight dollar loans, the greenback regained traction and was seen as one of the key factors that assisted the pair to catch some fresh bids on Wednesday.

The already stronger sentiment surrounding the buck got an additional boost following the release of stronger-than-expected US macro data – ADP report on private-sector employment and ISM Manufacturing PMI print for the month of March.

Data released this Wednesday showed that the US private-sector employment declined by 27K in March as compared to consensus estimates pointing to a fall of 150K. Adding to this, the US ISM Manufacturing PMI edged down to 49.1 in March (45.0 expected) from 50.1 previous.

On the other hand, the commodity-linked currency – the loonie – remained depressed in the wake of some renewed weakness in crude oil prices and was further weighed down by the Markit PMI, which showed a record downturn in the Canadian manufacturing output during March.

Bulls, however, seemed rather unimpressed by the combination of supporting factors, rather opted to lighten their positions amid persistent worries over the ever-increasing number of confirmed coronavirus cases in the United States.

Technical levels to watch