- USD / CAD is up for the fifth week in a row, up 0.25%.
- The dollar is rising steadily, despite falling US bond yields.
- USD / CAD Technical Outlook: A break above 1.2654 would expose 1.2800.
The USD / CAD it rises during the day, looking to close higher for the fifth consecutive week, trading at 1.2632 at the time of writing. As the weekend approaches, USD / CAD bulls continue to push the pair higher, despite aggressive stance from the Bank of Canada (BoC) over the past two months. USD bulls benefited from the Fed’s announcement of a gradual reduction in bonds at the November 3 monetary policy meeting, prompting a 10-year US Treasury yield to rebound above 1.60%. .
However, US bond yields are plummeting on the day, with the 10-year yield at 1,528%, down nearly six basis points, at press time. In addition, the dollar is up 0.30% with the US dollar index, located at 95.82, well below the weekly highs, around 96.00. So how is it possible that the USD / CAD pair is going up? The answer lies in the fall in oil prices.
The evolution of the last three days in the oil market that involved the White House and Asian allies agreed to “intervene” in the oil market, as high energy prices threaten to weaken global economic growth. China’s authorities have already said they plan to tap into some of its oil reserves.
Commodity strategists at Goldman Sachs noted that the market has valued the supply of 100 million barrels. They added that it could limit the scope of a further downside due to the news of the reserve launch. At press time, Western Texas Intermediate (WTI) is trading at $ 75.31, a drop of 3.71%.
USD / CAD Price Forecast: Technical Outlook
As the weekend approaches, the USD / CAD bulls continue to push the pair higher, although they encountered stiff resistance at the October 3 high of 1.2654. It is worth noting that the swing high is also a weekly resistance that the USD bulls fail to break through. However, a breakout of the latter would expose the confluence of a bearish resistance trend line and the September 29 high around the 1.2770-85 area. A sustained break above the former would expose the September 20 high at 1.2895.
On the other hand, the failure of a daily close above the October 3 high would add additional pressure on the pair. The first demand zone on the way south would be the 100-day moving average (DMA) at 1.2549, followed by the 50-day DMA at 1.2528. A breakout of the latter could send the USD / CAD down towards the November 15 low of 1.2492.
Technical levels
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