USD/CAD advances toward 1.3600 on USD strength, oil selloff


  • USD/CAD gains traction during American session on Thursday.
  • US Dollar Index advances above 96.70 on risk aversion.
  • WTI slumps below $40, weighs on commodity-sensitive loonie.

The USD/CAD pair moved sideways near 1.3500 for the majority of the day before gaining traction during the early trading hours of the American session. Boosted by the broad-based USD strength, the pair shot to a fresh daily high of 1.3586 and has gone into a consolidation phase. As of writing, the pair was up 0.47% on the day at 1.3575.

USD capitalizes on risk aversion

In the absence of significant macroeconomic data releases, markets reacted to political developments in the US. The Supreme Court ruled on Thursday that Manhattan District Attorney Cy Vance Jr. is allowed to obtain US President Donald Trump's financial records in his investigation.

With the initial reaction, Wall Street's main indexes turned south and the US Dollar Index (DXY) surged higher, reflecting a risk-off market environment. As of writing, the DXY was up 0.27% on the day at 96.75.

On the other hand, crude oil prices came under strong selling pressure in the second half of the day amid a flight to safety. The barrel of West Texas Intermediate erased all of its weekly gains in a matter of hours and was last seen losing 2.83% at $39.70.

On Friday, Statistics Canada will release the jobs report for June. Previewing the data, "our bias is that the CAD will be satisfied with a solid jobs number even if it comes in below expectations," said TD Securities analysts. "We think the CAD could reflect concern if we see a substantial disappointment, perhaps below 500k."

Technical levels to watch for

USD/CAD

Overview
Today last price 1.3575
Today Daily Change 0.0063
Today Daily Change % 0.47
Today daily open 1.3512
 
Trends
Daily SMA20 1.3588
Daily SMA50 1.3737
Daily SMA100 1.382
Daily SMA200 1.35
 
Levels
Previous Daily High 1.3624
Previous Daily Low 1.3493
Previous Weekly High 1.3705
Previous Weekly Low 1.3545
Previous Monthly High 1.3802
Previous Monthly Low 1.3316
Daily Fibonacci 38.2% 1.3543
Daily Fibonacci 61.8% 1.3574
Daily Pivot Point S1 1.3462
Daily Pivot Point S2 1.3412
Daily Pivot Point S3 1.3331
Daily Pivot Point R1 1.3593
Daily Pivot Point R2 1.3674
Daily Pivot Point R3 1.3724

 

 

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