- The onset of aggressive dollar buying helped USD/CAD trim its intraday losses.
- Bullish oil prices continued to support the loonie and capped any significant gains.
- Investors are now waiting for the US economic data to get some short term trade boost.
The pair USD/CAD rallied a few pips from a two-week low hit earlier this Tuesday and was last seen trading just below 1.2850, still down more than 0.25% on the day.
Rising crude oil prices have underpinned the commodity-linked loonie and dragged the USD/CAD pair lower for the third day in a row. G7 leaders agreed to study the possibility of capping prices on Russian oil and gas imports, fueling supply concerns. Elsewhere, the easing of COVID-19 restrictions in China raised hopes of demand recovery and pushed crude prices to a one-week high.
Elsewhere, the US dollar rallied strongly, snapping a two-day losing streak to hit a one-week low, amid a nice rebound in US Treasury yields. This, in turn, helped the USD/CAD pair find decent support near the 1.2820-1.2815 region and halt its intraday bearish trajectory, although any significant upside still looks elusive.
Investors were bullish on the hope that inflation is nearing its peak, which was evident in the prevailing risk appetite environment in equity markets. Lower inflation expectations also appear to have forced investors to lower their expectations of more aggressive monetary policy tightening by the Federal Reserve, which could limit dollar gains.
Therefore, it will be prudent to wait for a strong follow-up of buying before confirming that the recent pullback from the year’s high has run its course and placing further bullish bets on the USD/CAD pair. Market participants now await the US economic docket, in which the Conference Board Consumer Confidence Index and the Richmond Manufacturing Index will be released.
The data, coupled with US bond yields and general market risk sentiment, will boost dollar demand and provide some lift to the USD/CAD pair. Traders will follow oil price dynamics to take advantage of short-term opportunities around the pair. However, attention will remain focused on the OPEC+ meeting and Fed Chairman Jerome Powell’s appearance on Wednesday.
Technical levels
USD/CAD
Panorama | |
---|---|
Last Price Today | 1.2849 |
Today’s Daily Change | -0.0030 |
Today’s Daily Change % | -0.23 |
Today’s Daily Opening | 1.2879 |
Trends | |
---|---|
20 Daily SMA | 1.2798 |
50 Daily SMA | 1.2807 |
100 Daily SMA | 1.2732 |
200 Daily SMA | 1.2678 |
levels | |
---|---|
Previous Daily High | 1.2916 |
Previous Daily Minimum | 1.2865 |
Previous Maximum Weekly | 1.3039 |
Previous Weekly Minimum | 1,289 |
Monthly Prior Maximum | 1.3077 |
Previous Monthly Minimum | 1.2629 |
Daily Fibonacci 38.2% | 1.2884 |
Daily Fibonacci 61.8% | 1.2897 |
Daily Pivot Point S1 | 1.2857 |
Daily Pivot Point S2 | 1.2835 |
Daily Pivot Point S3 | 1.2805 |
Daily Pivot Point R1 | 1.2909 |
Daily Pivot Point R2 | 1.2939 |
Daily Pivot Point R3 | 1.2961 |
Source: Fx Street
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