- A combination of factors helped the USD / CAD gain some positive traction on Wednesday.
- A rally in US bond yields and risk aversion extended some support to the dollar as a safe haven.
- Falling oil prices undermined the loonie, although a stronger report from the Canadian CPI limited gains.
- Investors remain on the sidelines as the focus remains on the Minutes of the FOMC meeting.
The pair USD / CAD it updated daily lows in reaction to stronger Canadian consumer inflation figures, although it lacked subsequent sales. The pair was last seen trading near the upper end of its daily moving range, around the 1.2080-85 region.
The pair gained some positive traction on Wednesday and built on the good bounce the day before from near the key psychological 1.2000 mark, or multi-year lows. The rally was supported by a modest rally in the US dollar and falling crude oil prices, which tend to undermine demand for the commodity-linked Canadian dollar.
The USD found some support thanks to a new boost in US Treasury yields. Apart from this, a sell-off in the equity markets provided an additional boost to the safe-haven dollar. The positive movement in the USD could further be attributed to some repositioning of trade ahead of Wednesday’s release of the Minutes of the FOMC meeting.
Meanwhile, oil prices extended the overnight retracement slide from lows of more than two months and witnessed strong selling for the second straight session on Wednesday. This was seen as another factor that acted as a tailwind for the USD / CAD pair. That said, higher-than-expected Canadian consumer inflation limited any further hikes.
Data released by Statistics Canada revealed that the headline CPI rose to 3.4% in April from 2.2% in the previous month. This was higher than consensus estimates pointing to a 3.2% reading. On a monthly basis, the CPI reached 0.5% during the reported month compared to market expectations of a modest drop to 0.4%.
The data bodes well for a more aggressive Bank of Canada, although it did little to provide a significant boost to the loonie. Investors seemed reluctant to make aggressive bets, preferring to wait on the sidelines and await the much-anticipated FOMC Minutes for a new directional boost.
Technical levels
USD / CAD
| Panorama | |
|---|---|
| Today’s Last Price | 1.2096 |
| Today’s Daily Change | 0.0030 |
| Today’s Daily Change% | 0.25 |
| Today’s Daily Opening | 1.2066 |
| Trends | |
|---|---|
| SMA of 20 Daily | 1.2252 |
| SMA of 50 Daily | 1.2427 |
| SMA of 100 Daily | 1.2565 |
| 200 SMA Daily | 1.2831 |
| Levels | |
|---|---|
| Daily Previous Maximum | 1.2081 |
| Daily Previous Minimum | 1.2013 |
| Weekly Preview Maximum | 1.2203 |
| Weekly Prior Minimum | 1.2046 |
| Monthly Previous Maximum | 1.2654 |
| Minimum Previous Monthly | 1.2266 |
| Daily Fibonacci 38.2% | 1.2039 |
| Daily Fibonacci 61.8% | 1.2055 |
| Daily Pivot Point S1 | 1.2025 |
| Daily Pivot Point S2 | 1.1985 |
| Daily Pivot Point S3 | 1.1957 |
| Daily Pivot Point R1 | 1.2094 |
| Daily Pivot Point R2 | 1.2122 |
| Daily Pivot Point R3 | 1.2162 |
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