Despite decreased oil prices, USDCAD fights above 1.3400; news on the US midterm elections is in focus

Amid tumultuous market conditions, the USDCAD is trading near 1.3450 ahead of Wednesday's European session. In addition to covid concerns from China and a cautious disposition before of significant data/events, the closure of the United States government has restricted the Loonie pair's recent fluctuations.

However, weakening prices of Canada's principal export, especially WTI Crude Oil, support USDCAD bulls. As of press time, the energy benchmark has decreased for three consecutive trading days, falling 0.85% intraday to approximately $87.75.

Aside from this, the US Dollar Index (DXY) shows small increases near 109.70 despite mounting fears of a US government deadlock due to the outcomes of the most recent election. In addition to articles anticipating a six-month high in China's covid rate and additional virus-driven lockdowns, the market's concerns and the USDCAD exchange rate may be heightened.

S&P 500 Futures struggle to replicate Wall Street's advances, as US 10-year Treasury rates stay bearish despite breaking a four-day downturn the previous day.

The uncertainty around Thursday's US Consumer Price Index (CPI) for October and a speech by the Governor of the Bank of Canada (BOC), Tiff Macklem, provides a challenge to pair purchasers, it should be noted. Recent inconsistent US numbers and Fedspeak, as well as the BOC's delaying of rate hikes, may be to blame.

A one-week-old descending trend line depicts the current USDCAD decline. The bearish MACD signal and the obvious breach of the preceding support line from the beginning of October also provide sellers with optimism. In addition, the bearish picture is strengthened by the pair's continued trading below the 200-SMA.