USD/CAD: Bears keep reins at two-week low around 1.2650 ahead of BOC

  • USD/CAD stays pressured near 12-day low after declining the most since late August.
  • Oil retreats from weekly top despite price-positive EIA inventories.
  • Risk-on mood, expectations of hawkish halt from BOC favor bears.
  • Virus updates, China news are also important, US inflation is the key.

USD/CAD remains on the back foot around 1.2650, following the heavy fall to refresh a two-week low. That said, the quote seesaws of late as Asian traders brace for Wednesday’s Bank of Canada (BOC) Interest Rate Decision.

The Loonie pair dropped the most since August 23 on Tuesday as risk-on mood joins upbeat prices of Canada’s main export WTI crude oil.

Market sentiment improved amid receding fears of the South African coronavirus variant, dubbed as Omicron, as well as hopes of more stimulus from China after Beijing pledged to safeguard the financial system. Adding to the risk-on mood could be mixed data from the US and an absence of Fedspeak ahead of next week Federal Reserve (Fed) monetary policy meeting.

WTI cheered upward revision to 2022 demand forecast by the US Energy Information Administration (EIA) and growing tension between Russia and Ukraine. As per Reuters, “The Biden administration is in ‘intensive consultations’ with the new German government over its response if Russia invades Ukraine and believes Germany would be ready to take significant action if Russia launches an attack, a senior U.S. State Department official said on Tuesday.”

Elsewhere, firmer prints of Canada’s International Merchandise Trade for October and Ivey Purchasing Managers Index for November add to the Canadian dollar’s (CAD) strength.

Amid these plays, the US 10-year Treasury yields remained firmer the previous day while Wall Street benchmarks also had a good day for bulls.

Moving on, USD/CAD traders will pay close attention to how the BOC hints at the possible rate hike after the bond purchases were ended in October. That said, the benchmark interest rate is likely to remain unchanged at 0.25%.

“The BoC will maintain that the outlook is evolving in line with the October MPR, and we expect it to repeat that inflation strength is largely transitory,” said TD Securities ahead of the event.

Technical analysis

A clear downside break of 20-DMA level of 1.2680 and an ascending support line from November 16, now resistance around 1.2790, directs USD/CAD bears toward an upward sloping trend line from late October, near 1.2570.

Additional important levels

Today last price 1.2644
Today Daily Change -0.0116
Today Daily Change % -0.91%
Today daily open 1.276
Daily SMA20 1.2662
Daily SMA50 1.2542
Daily SMA100 1.2579
Daily SMA200 1.2477
Previous Daily High 1.2843
Previous Daily Low 1.2754
Previous Weekly High 1.2846
Previous Weekly Low 1.2713
Previous Monthly High 1.2837
Previous Monthly Low 1.2352
Daily Fibonacci 38.2% 1.2788
Daily Fibonacci 61.8% 1.2809
Daily Pivot Point S1 1.2729
Daily Pivot Point S2 1.2697
Daily Pivot Point S3 1.264
Daily Pivot Point R1 1.2817
Daily Pivot Point R2 1.2874
Daily Pivot Point R3 1.2906



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. The author will not be held responsible for information that is found at the end of links posted on this page.

If not otherwise explicitly mentioned in the body of the article, at the time of writing, the author has no position in any stock mentioned in this article and no business relationship with any company mentioned. The author has not received compensation for writing this article, other than from FXStreet.

FXStreet and the author do not provide personalized recommendations. The author makes no representations as to the accuracy, completeness, or suitability of this information. FXStreet and the author will not be liable for any errors, omissions or any losses, injuries or damages arising from this information and its display or use. Errors and omissions excepted.

The author and FXStreet are not registered investment advisors and nothing in this article is intended to be investment advice.

Feed news

Latest Forex News

Latest Forex News

Editors’ Picks

EUR/USD on the way to 1.1280 key support

EUR/USD fails to cheer greenback weakness, stays depressed around 1.1310 during the initial Asian session on Friday. While portraying the sober mood of the major pair traders, the quote remains below 200-SMA for the first time in a fortnight.


GBP/USD holds above 1.3600 as dollar fails to capitalize on US data

GBP/USD tested 1.3600 earlier in the day but managed to stage a recovery in the early American session. The greenback is having a hard time gathering strength as investors assess the mixed macroeconomic data releases from the US.


Gold bulls looking for a re-test of November high at 1,877.15

Gold resumed its advance after a short-lived consolidative stage, reaching a fresh two-month high of $1,847.92 a troy ounce. The dollar came under renewed selling pressure after the US released mixed economic figures.

Gold News

Decentraland holds support but MANA may return to $2

Decentraland price action is, at present, very indecisive. However, while the overall outlook is bearish – especially within the Ichimoku Kinko Hyo system, there is evidence that a turnaround to the upside may be coming soon.

Read more

When real rates are negative for a sustained period, is it a sign of looming recession?

We agree that inflation should moderate this year due to the money side of things, but worry that monetary policy is powerless against most of the supply chain issues, commodity prices, greedy consumer goods companies, and that weird labor shortage.

Read more