- The Loonie weakens as oil falls.
- US dollar remains under pressure as US yields print new lows.
- USD/CAD is back above 1.2820.
The USD/CAD rose more than 60 pips and hit a new daily high at 1.2830. On Monday it had bottomed at 1.2766, the lowest intraday level since June 10th.
The move higher came amid an overall weaker Canadian dollar as crude oil prices fell. WTI is falling more than 5.50%, a barrel is hovering around $93.
USD/CAD’s rebound is limited by the decline in the US dollar. The greenback remains under pressure as the market continues to rise and Treasuries continue to rise. The Dow Jones is up 0.20% and stands at the highest level since early June. Yields on 10-year US bonds fell below 2.60%, the lowest level since April 7.
US economic data was mixed. The ISM Manufacturing PMI fell to the lowest level since 2020, settling at 52.8, better than the market consensus (52). Construction spending unexpectedly fell 1.1% in June. As for the data, the critical day of the week will be Friday with the official employment reports to be published in Canada and the United States.
Bearish, but rebounds offer bulls hope
The short-term trend in USD/CAD points to the downside. Though the pair bounced off important support at 1.2775 (100 SMA), easing negative momentum.
If the bounce continues, the dollar will face resistance between 1.2830 and 1.2850. Attention would then turn to 1.2900. The next key level is the 20 day simple moving average at 1.2930. A daily close above this level would change the bias to the upside.
A decline below 1.2800 would reinforce the bearish outlook. Support levels below are 1.2766 (Aug 1 low) and 1.2730.
Technical levels
Source: Fx Street
With 6 years of experience, I bring to the table captivating and informative writing in the world news category. My expertise covers a range of industries, including tourism, technology, forex and stocks. From brief social media posts to in-depth articles, I am dedicated to creating compelling content for various platforms.
