USD/CAD trades with modest losses, bears eyeing a break below 1.3500 mark

• USD/CAD remained depressed for the fourth consecutive session on Wednesday.
• The upbeat market mood weighed the safe-haven USD and exerted some pressure.
• Weaker oil prices undermined the loonie and might help limit any deeper losses.

The USD/CAD pair traded with a mild negative bias for the fourth consecutive session on Wednesday, albeit has still managed to hold above the key 1.3500 psychological mark.

The pair struggled to capitalize on its uptick witnessed during the Asian session, rather met with some fresh supply near the very important 200-day SMA resistance around the 1.3575 region. The intraday pullback was sponsored by a modest US dollar weakness, though remained cushioned amid sliding crude oil prices.

Despite fears over rising numbers of COVID-19 cases and geopolitical tension in Asia, the global risk sentiment remained well supported by the Fed's announced changes to its bond-buying program. The Fed on Monday stated that it will start purchasing a diversified range of investment-grade US corporate bonds to ensure credit market liquidity.

Adding to this, report that the Trump administration was contemplating a $1 trillion infrastructure spending and a positive breakthrough in the fight against the coronavirus pandemic further boosted investors' confidence. Trial results announced on Tuesday showed that death rates were reduced by about a third in COVID-19 patients who took widely used steroid called dexamethasone.

The greenback was further pressured by a fresh leg down in the US Treasury bond yields. However, a weaker tone surrounding crude oil prices undermined the commodity-linked currency – the loonie. This, in turn, seemed to be the only factor that might help limit any deeper losses for the USD/CAD pair, at least for the time being.

Moving ahead, market participants now look forward to Wednesday's economic docket, featuring the release of Canadian consumer inflation figures and the US housing market data. This will be followed by the Fed Chair Jerome Powell's second day of testimony, which might influence the USD price dynamics and produce some meaningful trading opportunities.

Technical levels to watch