USD/CAD falls to a new multi-week low below 1.3400

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  • USD/CAD falls to seven-week lows on Monday pressured by a combination of factors.
  • Risk appetite and rising commodities prop up the loonie and put pressure on the dollar.
  • The diminishing odds of more aggressive Fed rate hikes are also weighing on the dollar.

The pair USD/CAD remains under strong selling pressure for the second day in a row and falls to its lowest level since late November heading into the North American session on Monday. The pair is currently sitting around the 1.3380-1.3375 zone, down almost 0.50% on the day, and is being pressured by a combination of factors.

The Canadian dollar It continues to receive support from the encouraging national employment data on Friday, which raised expectations of additional rate hikes from the Bank of Canada. Additionally, a strong intraday recovery of more than 3% in oil prices, bolstered by the further turnaround from China away from its strict zero-COVID policy, underpins the loonie. This, along with the continued selling bias of the US dollar, contributes to the bearish tone surrounding the USD/CAD pair and the ongoing bearish trajectory.

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The release of the US monthly employment report (NFP) and the disappointing release of the US ISM services PMI on Friday raised bets for a less aggressive tightening of policy by the Fed. Indeed , markets are pricing in a 25 basis point Fed rate hike in February, bolstered by a further decline in Treasury yields. On the other hand, the generally positive tone in the equity markets has also contributed to putting additional pressure on the USD/CAD pair.

That being said, concerns about a deeper global economic downturn are keeping optimism in the markets at bay, which could help limit USD losses. However, the USD/CAD pair breaking below the 100 SMA technically significant. Also, a subsequent drop below 1.3400 could be seen as a new trigger for bears. The lack of relevant macroeconomic data, both from the US and Canada, could support the prospects of a further depreciation movement in the pair.

technical levels


Last price today 1.3376
Today Change Daily -0.0068
today’s daily variation -0.51
today’s daily opening 1.3444
daily SMA20 1.3588
daily SMA50 1.3522
daily SMA100 1.3476
daily SMA200 1.3148
previous daily high 1.3664
previous daily low 1.3433
Previous Weekly High 1.3685
previous weekly low 1.3433
Previous Monthly High 1.3705
Previous monthly minimum 1.3385
Fibonacci daily 38.2 1.3522
Fibonacci 61.8% daily 1.3576
Daily Pivot Point S1 1.3364
Daily Pivot Point S2 1.3283
Daily Pivot Point S3 1.3132
Daily Pivot Point R1 1.3595
Daily Pivot Point R2 1.3745
Daily Pivot Point R3 1.3826
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Source: Fx Street

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