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USD/CAD near 1.3400 level amid rising oil prices and slight dollar weakness

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  • USD/CAD hits some selling on Tuesday and breaks a three-day winning streak.
  • The recovery in oil prices benefits the CAD and acts as a headwind for the pair amid a weaker USD.
  • Recession fears and hawkish expectations around the Fed limit losses for the USD and the pair.

The pair USD/CAD comes under some selling pressure on Tuesday, breaking a three-day winning streak at two-week highs around the 1.3475 area touched the day before. The pair maintains its selling tone during the first half of the European session and is currently near the daily low, just above the 1.3400 level.

The Crude oil prices extend the previous day’s good rebound from a low of almost two months and gain traction for the second day in a row in the middle of the optimism about a recovery in fuel demand. This, in turn, benefits the commodity price-linked CAD, which, coupled with modest US dollar weakness, puts downward pressure on the USD/CAD pair. That being said, a combination of factors is helping to limit the pair’s losses, at least for now.

The concern about financial hardship stemming from the worst COVID-19 outbreak to date in China and the rapidly rising borrowing costs could continue to act as a headwind for black gold. Apart from this, the new speculation that the Federal Reserve will maintain its hawkish stance they should lend some support to the safe haven dollar. This, in turn, supports the prospects for some buying at lower levels around the USD/CAD pair.

Traders could also refrain from entering aggressive positions ahead of the Fed Chairman’s speeches, Jerome Powelland the Governor of the Bank of Canada, Tiff Macklen, scheduled for later in the American session. Investors will look for further indications of the future path of rate hikes, which in turn could determine the near-term path of the USD/CAD pair.

Technical levels to watch

USD/CAD

Overview
Last price today 1.3412
Today Change Daily -0.0031
today’s daily variation -0.23
today’s daily opening 1.3443
Trends
daily SMA20 1.3383
daily SMA50 1.3498
daily SMA100 1.3536
daily SMA200 1.3225
levels
previous daily high 1.3476
previous daily low 1.3397
Previous Weekly High 1.3472
previous weekly low 1.3262
Previous Monthly High 1.3685
Previous monthly minimum 1.33
Fibonacci daily 38.2 1.3446
Fibonacci 61.8% daily 1.3427
Daily Pivot Point S1 1.3401
Daily Pivot Point S2 1.3359
Daily Pivot Point S3 1.3322
Daily Pivot Point R1 1,348
Daily Pivot Point R2 1.3517
Daily Pivot Point R3 1.3559
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Source: Fx Street

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