- USD / CAD witnessed a modest intraday pullback from week-long highs amid dovish USD demand.
- A softer tone around crude oil prices weighs on the CAD and should help limit any further losses.
- Investors are now waiting for the US economic releases to find some significant business opportunities.
The pair USD / CAD has fallen to the 1.2100 level during the first half of the European session on Thursday, although it has quickly recovered a few pips. At the time of writing, the pair remains practically unchanged on the day around the 1.2115-20 region.
The pair has struggled to capitalize on its initial rally and has run into new sales close to the region of 1.2140 And, for now, it seems to have stopped two consecutive days of winning streak. The recoil is due exclusively to a modest US dollar weaknessAlthough a softer tone around crude prices has weighed on the Canadian dollar, a currency pegged to commodity prices, and has helped limit any further losses in the pair.
The USD’s attempted recovery from the lowest level since January has lost steam amid firm expectations that the Fed will maintain its ultra-flexible policy stance for a longer period. The bulls have overlooked the previous day’s comments from Fed Vice Chairman Randal Quarles, who said he is getting closer to starting a discussion on gradually reducing Fed bond purchases if economic data is stronger than that. the expected.
That said, a modest rally in US Treasury yields should help support the US dollar. This, along with a modest decline in crude oil prices has prevented investors from opening aggressive bearish positions around the USD / CAD pair. Oil prices are moving lower amid concerns about a possible surge in Iranian supplies, overshadowing optimism about the recovery in demand for fuel.
This makes it prudent to wait for a strong continuation of selling before positioning yourself for the resumption of the recent and well-established downturn. Market participants are now waiting for the US economic calendar, which features preliminary first quarter (first review) GDP releases, initial weekly jobless claims, durable goods orders and pending home sales, to get some momentum.
This, along with US bond yields, will influence the USD during the American session. Apart from this, investors could follow the signs of the dynamics of the oil price. This, in turn, should allow investors to seize some short-term opportunities around the USD / CAD pair.
USD / CAD technical levels
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