• USD/CAD erases some of Monday’s losses and gains some 0.24%.
  • A dampened market mood keeps safe-haven currencies like the greenback in the driver’s seat.
  • Investors brace for US Consumer Price Index for July, with headline inflation estimated to fall.

The USD/CAD slightly advances from around Monday’s lows amidst a downbeat market sentiment due to traders preparing for July’s US inflation report. Also, geopolitical jitters, spurred by US House Speaker Pelosi’s trip to Taiwan, caused an aggressive reaction from China, extending its military drills beyond the due date.

The USD/CAD is trading at 1.2884 above its opening price after hitting a daily low at 1.2843 early in the North American session.

USD/CAD climbs on dismal sentiment

USD/CAD Tuesday’s price action is driven by investors preparing for US CPI. Last Friday’s US jobs report poured cold water on recession fears after creating 528K new jobs in the economy, consequently driving down the unemployment rate to 3.5%.

Meanwhile, investors quickly reacted to the US Department of Labor data, with money market futures odds of a 75 bps rate hike by the Fed sitting at 88%. Nevertheless, odds could be diminished if inflation numbers come lower than estimated, could influence the Fed to tighten at a slower rate.

In the meantime, according to analysts, a dismal Canada job report, slashing 30.6K jobs from the economy, is not seen as a factor to deter the Bank of Canada from hiking rates. Given that the BoC surprised markets by raising rates by 100 bps last month, analysts at Scotiabank commented that although July’s employment report disappointed, the BoC would continue tightening policy.

What to watch

An absent Canadian economic docket will leave USD/CAD traders adrift to US dollar dynamics. Meanwhile, the US docket will reveal July’s US Consumer Price Index, alongside a tranche of  Fed speakers, led by Chicago’s Fed President Charles Evans and Minneapolis Fed Neil Kashkari, after the US inflation report.

USD/CAD Key Technical Levels

USD/CAD

Overview
Today last price 1.2884
Today Daily Change 0.0031
Today Daily Change % 0.24
Today daily open 1.2853
 
Trends
Daily SMA20 1.2902
Daily SMA50 1.2868
Daily SMA100 1.2788
Daily SMA200 1.2739
 
Levels
Previous Daily High 1.295
Previous Daily Low 1.2839
Previous Weekly High 1.2985
Previous Weekly Low 1.2768
Previous Monthly High 1.3224
Previous Monthly Low 1.2789
Daily Fibonacci 38.2% 1.2881
Daily Fibonacci 61.8% 1.2908
Daily Pivot Point S1 1.2811
Daily Pivot Point S2 1.2769
Daily Pivot Point S3 1.2699
Daily Pivot Point R1 1.2922
Daily Pivot Point R2 1.2992
Daily Pivot Point R3 1.3034

 

 

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