- USD / CAD trimmed some losses on Monday, rising 0.09%.
- Despite registering a daily maximum of Omicron-Covid-19 cases, around 1.4 million worldwide, the mood of investors is optimistic.
- High US crude prices failed to raise the CAD outlook.
- USD / CAD Price Forecast: Limited in range, although slightly sloping to the downside.
The USD / CAD it is bouncing away from weekly lows trading at 1.2804 during the American session at the time of writing. Financial markets are in risk appetite mode as the S&P 500 approaches the 4,800 barrier, despite posting the largest increase in Covid-19 infections worldwide, topping 1.4 million. Meanwhile, Western Texas Intermediate, the benchmark US crude oil index, which correlates with the Canadian dollar, is up 0.97%, trading at $ 76.28 a barrel, without raising the outlook for the Canadian dollar.
Meanwhile, the US dollar index, which measures the performance of the dollar against a basket of its rivals, remains unchanged at 96.10, supported by the yield on the US 10-year Treasury bond which fell 1bp to 1,464%. .
Apart from this, the US Center for Disease Control and Prevention (CDC) announced a reduction of the isolation time, from 10 to 5 days, a major change as the Omicron variant takes its toll on US citizens. . On Monday France introduced some restrictions, such as working from home at least three times a week, while the UK stands still but ready to act if necessary.
USD / CAD remained subdued overnight, within familiar levels, as a lack of liquidity has kept most G8 currencies “trapped” in tight ranges. In the case of the Canadian dollar, the range has been 1.2780-1.2800. That said, USD / CAD traders would rely on market sentiment, commodity price behavior, particularly oil, and the dynamics of the US dollar as the end of the year approaches.
USD / CAD Price Forecast: Technical Outlook
The USD / CAD 1-hour chart shows consolidation over the last two trading days, although CAD strengthened on Monday, falling from 1.2846 to 1.2785. The bearish move stalled around the daily low on December 24 at 1.2785, but on its way south it broke the 50 hourly simple moving average (SMA).
At time of writing, the pair would find stiff resistance at the confluence of the daily center pivot point and the 50 hourly SMA at 1.2802. A break above that level would send USD / CAD to the 100 hourly SMA at 1.2820, followed by the R1 daily pivot at 1.2826.
On the other hand, the first line of defense to the downside of the USD / CAD would be the daily low of December 27 at 1.2778, followed by the low of December 16 at 1.2763. A break below the latter would expose the daily S1 pivot at 1.2758, followed by the S2 pivot at 1.2734.
Technical levels
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