- 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|
|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
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.