- USD/CAD sees some selling on Wednesday and gives back some of the previous day’s strong gains.
- Bullish crude oil prices benefit the CAD and put some downward pressure on the pair.
- The decline appears supported amid broad USD strength and ahead of the BoC decision.
The pair USD/CAD moves lower during the first half of the European session on Wednesday, trading close to the daily low just above the 1.2700 level.
The pair struggled to capitalize on the previous day’s sharp rebound of around 100 pips from a near three-week low around 1.2650, and was met with fresh selling on Wednesday. A further escalation of tensions between Russia and Ukraine pushed crude oil prices to the highest level since 2014. This, in turn, supported the CADcurrency linked to the prices of raw materials, and put some downward pressure on the pair USD/CAD. That said, the appearance of fresh buying around the USD helped limit any deeper losses, at least for the time being.
The worsening of the situation in Ukraine, along with a nice rally in US Treasury yields, turned out to be key factors acting as a tailwind for the USD. In recent events, the news indicated that Russia has stepped up bombing of Ukrainian cities and a large Russian convoy was approaching the capital Kiev. Investors also seemed reluctant to open aggressive positions before Bank of Canada monetary policy decisionscheduled to be announced later at the start of today’s American session.
Turning to the United States, investors will take cues from the ADP report on private sector employment and Fed Chairman Jerome Powell’s semi-annual testimony before the House Financial Services Committee. However, the key focus will remain on new geopolitical developments and incoming news from the Russia-Ukraine talks. The mixed fundamental backdrop warrants some caution before positioning for any further bearish moves in the USD/CAD pair.
USD/CAD technical levels
Source: Fx Street
Donald-43Westbrook, a distinguished contributor at worldstockmarket, is celebrated for his exceptional prowess in article writing. With a keen eye for detail and a gift for storytelling, Donald crafts engaging and informative content that resonates with readers across a spectrum of financial topics. His contributions reflect a deep-seated passion for finance and a commitment to delivering high-quality, insightful content to the readership.
