- USD/CAD is in some supply on Friday and is pressured by modest USD weakness.
- Aggressively, Fed expectations and falling oil prices limit losses ahead of the Canadian employment report.
- A convincing break below 1.3600 could change the bias in favor of the bears.
The pair USD/CAD comes under some selling pressure on Friday and reverses some of the previous day’s positive move to the 1.3700 area, or its highest level since late March. The pair, however, manages to bounce a few points from the daily low and trades around the 1.3665-1.3670 zone during the first half of the European session, with a drop of less than 0.15% on the day.
A modest pullback of the dollar from a six-month high, triggered by the decline in US Treasury yields, turns out to be a key factor putting some bearish pressure on the USD/CAD pair. That said, expectations that the Federal Reserve (Fed) will keep interest rates higher for longer should act as a tailwind for US bond yields and the USD. Apart from this, a softer tone around crude oil prices undermines the commodity-linked CAD and helps limit the pair’s decline. Traders also seem reluctant to place aggressive bets and prefer to wait for the release of the Canadian employment report, which will be released later in the North American session.
From a technical point of view, the intraday downtrend stops near the horizontal resistance of 1.3650, now converted into support. Any further decline is more likely to attract new buyers and remain capped near 1.3600. The latter should act as a key point, which if broken decisively should pave the way for a significant corrective decline. The USD/CAD pair could then accelerate its decline towards the next relevant support near the 1.3525 area en route to the key psychological level of 1.3500. Follow-through selling will expose the important 200-day SMA, currently around the 1.3460 area.
On the other hand, bulls could wait for the strength above 1.3700 to hold before making new bets. The subsequent bullish move could lift the USD/CAD pair towards the 1.3730 resistance zone on its way towards the round figure of 1.3800. The bullish trajectory could extend further and push spot prices to retest the year’s high, around the 1.3860 area touched in March.
USD/CAD Daily Chart
Technical levels to monitor
|Last price today||1.3668|
|Today Daily Variation||-0.0016|
|today’s daily variation||-0.12|
|today’s daily opening||1.3684|
|previous daily high||1.3694|
|previous daily low||1.3632|
|Previous Weekly High||1.3637|
|previous weekly low||1.3489|
|Previous Monthly High||1,364|
|Previous monthly minimum||1.3184|
|Fibonacci daily 38.2||1.3671|
|Fibonacci 61.8% daily||1.3656|
|Daily Pivot Point S1||1.3646|
|Daily Pivot Point S2||1.3608|
|Daily Pivot Point S3||1.3584|
|Daily Pivot Point R1||1.3709|
|Daily Pivot Point R2||1.3733|
|Daily Pivot Point R3||1.3771|
Source: Fx Street
I am Joshua Winder, a senior-level journalist and editor at World Stock Market. I specialize in covering news related to the stock market and economic trends. With more than 8 years of experience in this field, I have become an expert in financial reporting.