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USD/CAD registers a new daily low on the weakness of the dollar and the rebound in oil

  • USD/CAD pulls back from 1-week highs and is pressured by a combination of factors.
  • A modest rally in crude oil prices underpins the Loonie and acts as a headwind for the pair.
  • The dollar remains on the defensive amid bets on lower Fed rate hikes and puts pressure on.
  • The dominance of the risk averse state could support the safe haven dollar and help limit losses.

The pair USD/CAD it fell during the beginning of the North American session and reached a new daily low, around the zone of 1.3480-1.3475 in the last hour.

The dollar continues to be weighed down by expectations of less aggressive monetary policy tightening by the Fed and acts as a headwind for the USD/CAD pair. In fact, investors now seem convinced that the US central bank will soften its hawkish stance and current market prices indicate a higher probability of a smaller 25 basis point rate hike in February.

Aside from this, a modest rebound in oil prices underpins the commodity-linked Loonie and further helps cap USD/CAD gains. USD bulls, for their part, do not seem impressed by the better-than-expected release of the Philadelphia Fed Manufacturing Index and weekly initial jobless claims, which do not help to provide any momentum.

That being said, concerns about a deeper global economic downturn could continue to keep oil capped. Apart from this, a new wave of risk aversion across the globe, as evidenced by the Red Sea in global equity markets, could provide some support for the dollar and USD/CAD, warranting caution from traders. bassists.

From a technical standpoint, spot prices have failed to break above the 1.3500 psychological level or consolidate momentum beyond the 100-day SMA. Therefore, it is prudent to wait for strong follow-through buying before placing further bullish bets on the USD/CAD pair and positioning for any further appreciation.

Technical levels to watch


Last price today 1.3477
Today Change Daily -0.0023
today’s daily variation -0.17
today’s daily opening 1.35
daily SMA20 1.3505
daily SMA50 1.3495
daily SMA100 1.3507
daily SMA200 1.3182
previous daily high 1.35
previous daily low 1.3351
Previous Weekly High 1.3461
previous weekly low 1.3322
Previous Monthly High 1.3705
Previous monthly minimum 1.3385
Fibonacci daily 38.2 1.3443
Fibonacci 61.8% daily 1.3408
Daily Pivot Point S1 1.3401
Daily Pivot Point S2 1.3301
Daily Pivot Point S3 1.3251
Daily Pivot Point R1 1,355
Daily Pivot Point R2 1.36
Daily Pivot Point R3 1.3699

Source: Fx Street

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