- The loonie loses momentum against the dollar, falls against the AUD and the NZD due to appetite for risk.
- USD / CAD is still unable to move away from 1.2650.
The USD / CAD it rose more than fifty pips from the five-day low it reached Tuesday at 1.2589. It is again near the 1.2650 area, modestly lower for the day. The rally came amid a recovery in the US dollar and also as US yields move higher.
A drop in yields triggered a correction in the US dollar across the board on Tuesday. The DXY fell from monthly highs above 92.50 to 92.00 and is currently trading at 92.10, moving away from lows. Stock prices on Wall Street are much higher. The Dow Jones gains 0.82% and the Nasdaq 3.12%. Optimism in US markets did not boost demand for commodity currencies.
In the bond market, the US 10-year yield stands at 1,556%, the highest level since the early hours of the European session. The rally in yields helped the dollar trim losses. Also, gold and silver fell back during the last hour.
USD / CAD back to its actual area of ​​gravity
The pair is now back in the 1.2435 / 50 zone, where it has closed for the last seven trading days. Every run above or below has failed to hold for USD / CAD. The aforementioned area continues to be a field of attraction. That zone also contains the 20-day moving average.
A consolidation below 1.2600 would point to more losses, while a rise above 1.2700 should open the door to more gains.
Daily chart
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