- USD/CAD struggled to preserve its intraday gains amid modest USD weakness.
- Falling US bond yields turned out to be a key factor weighing on the dollar.
- Lower crude oil prices undermined the loonie and offered support to the pair.
The pair USD/CAD made sideways moves ahead of the American session and was last seen trading in neutral territory, around the 1.2925-1.2930 region.
A weaker tone around US Treasury yields prompted some US dollar selling on the first day of a new week, which, in turn, did not help the USD/CAD pair to capitalize on its gains. intraday earnings. The pair pulled back more than 50 pips from the daily high, around the 1.2980 region. That said, the drop in crude oil prices undermined the commodity-linked Canadian dollar and acted as a tailwind for the pair.
Weak Chinese macro data released on Monday underscored the damage caused by COVID-19 lockdowns in the world’s second-largest economy. This added to concerns about faltering global fuel demand and weighed on crude prices. That said, the European Union’s looming ban on Russian crude imports, coupled with concerns about shrinking global supply, acted as a tailwind for the commodity and helped limit deeper losses.
Investors also appear concerned that a more aggressive move by major central banks to limit inflation could hit global economic growth amid the war in Ukraine and China’s zero COVID-19 policy. This moderated investors’ appetite for assets perceived as riskier. The flow of risk aversion dragged the benchmark 10-year US government bond yield away from the recent high of 3.20% and put some pressure on the dollar.
That said, the reaffirmation of expectations that the Fed will tighten monetary policy at a faster pace should provide some support for the dollar and the USD/CAD pair. In fact, markets are pricing in at least a 50bp Fed rate hike move in the next two policy meetings. Therefore, investors will now examine comments from various FOMC officials, including Fed Chairman Jerome Powell, for clues about the possibility of a 75bp rate hike move.
Aside from this, traders will take note of the release of US Retail Sales figures on Tuesday and the Canadian CPI report on Wednesday before placing further directional bets on the USD/CAD pair.
Technical levels
USD/CAD
Panorama | |
---|---|
Last Price Today | 1.2927 |
Today’s Daily Change | -0.0001 |
Today’s Daily Change % | -0.01 |
Today’s Daily Opening | 1.2928 |
Trends | |
---|---|
20 Daily SMA | 1.2813 |
50 Daily SMA | 1.2695 |
100 Daily SMA | 1.2689 |
200 Daily SMA | 1.2652 |
levels | |
---|---|
Previous Daily High | 1.3049 |
Previous Daily Minimum | 1.2893 |
Previous Maximum Weekly | 1.3077 |
Previous Weekly Minimum | 1.2893 |
Monthly Prior Maximum | 1,288 |
Previous Monthly Minimum | 1.2403 |
Daily Fibonacci 38.2% | 1.2953 |
Daily Fibonacci 61.8% | 1,299 |
Daily Pivot Point S1 | 1.2864 |
Daily Pivot Point S2 | 1.28 |
Daily Pivot Point S3 | 1.2708 |
Daily Pivot Point R1 | 1,302 |
Daily Pivot Point R2 | 1.3113 |
Daily Pivot Point R3 | 1.3177 |
Source: Fx Street
With 6 years of experience, I bring to the table captivating and informative writing in the world news category. My expertise covers a range of industries, including tourism, technology, forex and stocks. From brief social media posts to in-depth articles, I am dedicated to creating compelling content for various platforms.