USD/CAD bounces off monthly lows amid broad US dollar strength
|- USD/CAD recovers from the lowest in four weeks.
- Fresh risk aversion, weak fundamentals elsewhere add strength to the US dollar.
- A mix of US/Canada data, crude oil moves, as well as headlines from China, can be considered as key catalysts.
USD/CAD takes the bids to 1.3235 during the pre-European session on Thursday. The pair recently bounced off the monthly lows as trade sentiment worsened following fresh coronavirus risk. The same pull Canada’s main export, crude oil, from the highest in four weeks.
A new methodology in counting the infected cases of coronavirus surprised market players during the Asian session. However, downbeat comments from the International Monetary Fund’s (IMF) Managing Director Kristalina Georgieva and rating giant S&P weighed on risk-tone off-late.
While portraying the risk-off, the US 10-year treasury yields drop two basis points to 1.55% whereas stocks in Asia have started scaling back the early-day gains.
In addition to the risk-off, the US dollar might also have been cheering a rate cut from the People’s Bank of China (PBOC) and downbeat Unemployment Rate from Australia.
Moving on, traders will observe today’s economic calendar comprising the Canadian New Housing Price Index and ADP Employment Change as well as the Philadelphia Fed Manufacturing Survey from the US. Additionally, headlines from China will be the key risk driver and hence are worth following.
Technical Analysis
In addition to 200-day SMA, around 1.3217, a confluence of 100-day SMA and an upward sloping trend line from January 07, close to 1.3180, restricts the pair’s near-term declines. However, the pair’s immediate upside is capped by 21-day SMA and an eight-day-old falling trend line, respectively, around 1.3240 and 1.3260.
Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers.