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USD/CAD rebounds from weekly lows and rises above 1.3700

  • USD/CAD breaks a two-day losing streak thanks to the improvement of the US Dollar.
  • Weakening crude oil prices affect the Canadian dollar.
  • The US dollar gains ground, driven by the possible adoption of a cautious stance by investors.

The USD/CAD pair recovers recent losses recorded in the previous two sessions and moves higher near the 1.3700 level at the start of the European session on Thursday. The pair receives bullish support, driven by the strengthening of the US Dollar (USD), which could be attributed to possible risk-off sentiment. Furthermore, falling crude oil prices contribute to this movement, especially considering that Canada is the largest exporter of oil to the United States (US).

The USD/CAD pair saw losses following the release of United States (US) economic data on Wednesday. The US Producer Price Index (PPI) unexpectedly fell by 0.5% compared to the expected increase of 0.1%. The year-on-year PPI also fell from 2.2% to 1.3%.

These figures are consistent with the moderation in inflation revealed by Tuesday’s data. This alignment increases the likelihood that the US Federal Reserve (Fed) will refrain from raising interest rates at its December meeting.

On the Canadian side, declines in crude oil prices weigh on the CAD, a currency linked to commodity prices. The price of West Texas Intermediate (WTI) oil is trading lower near $76.10 per barrel at the time of writing.

On the other hand, economic data from Canada could have provided support to the Canadian Dollar (CAD). Manufacturing sales (mom) showed an increase of 0.4% compared to the expected decline of 0.1% in September. MoM wholesale sales also improved to 0.4% from 1.8%.

Investors will now focus on Thursday’s weekly US jobless claims, looking for further impetus on the condition of the US labor market. Housing starts in Canada will also be published.

USD/CAD technical levels to watch

Latest price today 1.3708
Daily change today 0.0026
Today’s daily variation 0.19
Today’s daily opening 1.3682
daily SMA20 1.3768
daily SMA50 1.3657
SMA100 daily 1.3514
SMA200 daily 1.3506
Previous daily high 1,371
Previous daily low 1.3655
Previous weekly high 1.3855
Previous weekly low 1.3629
Previous Monthly High 1.3892
Previous monthly low 1.3562
Daily Fibonacci 38.2 1.3676
Fibonacci 61.8% daily 1.3689
Daily Pivot Point S1 1.3655
Daily Pivot Point S2 1.3627
Daily Pivot Point S3 1.3599
Daily Pivot Point R1 1,371
Daily Pivot Point R2 1.3738
Daily Pivot Point R3 1.3766

Source: Fx Street

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