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USD/CAD surpasses the 1.3550 zone due to risk aversion and the fall in oil prices.

  • The Dollar extends its gains favored by risk aversion.
  • Falling oil prices weigh on the Canadian dollar.
  • The corrective recovery of USD/CAD could find resistance at 1.3600 and 1.3620.

The US dollar maintains a moderately buying tone in the European session on Tuesday and moves away from the two-month highs, in the 1.3475 area that it reached on Monday.

The dollar is receiving support from the risk aversion sentiment in the markets. Investors are reluctant to make risky bets pending the release of US employment data confirming that the Federal Reserve’s tightening cycle has come to an end.

The drop in oil prices hurts the Canadian dollar

Beyond that, the decline in oil prices, with the US benchmark WTI hovering just above five-month lows at $72.20, is acting as a headwind for the CAD.

In Canada, the Bank of Canada is expected to keep rates at the current level of 5% and begin to step back in the tightening cycle in early 2024.

From a technical point of view, the pair is correcting higher, following a 3% sell-off in November. Next resistances likely lie at the 50 4-hour SMA at 1.3600 ahead of the Nov 30 high at 1.3622 and 1.3700.

Supports are 1.3520 and December 4 low at 1.3475.

USD/CAD Technical Levels

USD/CAD

Panorama
Today’s Latest Price 1.3557
Today’s Daily Change 0.0017
Today’s Daily Change % 0.13
Today’s Daily Opening 1,354
Trends
20 Daily SMA 1.3683
SMA of 50 Daily 1.3687
SMA of 100 Daily 1.3566
SMA of 200 Daily 1.3517
Levels
Previous Daily High 1.3562
Previous Daily Low 1,348
Previous Weekly High 1.3661
Previous Weekly Low 1.3487
Previous Monthly High 1.3899
Previous Monthly Low 1.3541
Daily Fibonacci 38.2% 1.3531
Daily Fibonacci 61.8% 1.3511
Daily Pivot Point S1 1.3493
Daily Pivot Point S2 1.3446
Daily Pivot Point S3 1.3411
Daily Pivot Point R1 1.3575
Daily Pivot Point R2 1,361
Daily Pivot Point R3 1.3657

Source: Fx Street

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