- USD/CAD is on track to match the daily lows last seen in February 2020.
- Bears need to hold below current 15 min resistance and break below 1.3270.
- There is a focus on the price of oil, geopolitics and the US dollar's recent correction.
USD/CAD bears are having a hard time taking out key levels on the way to the Feb lows as the greenback firms
Recent weakness in the US dollar had been exacerbated by a significant buildup of net short speculative positions, although real yields have firmed on the back of Friday's move which has breathed some life back into the greenback.
At the same time, there is a large repositioning taking place in the precious metals which can support the dollar at this juncture as well.
However, there are many uncertainties about the effectiveness of a new round of US fiscal stimulus or even whether it can be delivered any time soon. This in itself is a positive for the dollar, as it can collect a safe-haven demand.
Meanwhile, the loonie has firmed in the past month, riding a backdrop of upside economic surprises and stronger commodity prices.
Canada GDP grew 4.5% in May, followed by a further 5% (preliminary estimate) increase in June
The Canadian economy kept rebounding and ongoing positive news on the data side may form a base for additional gains.
Next week is not offering catalysts data-wise in Canada, so focus will stay on oil prices and the dollar as well as geopolitical developments driving risk sentiment.
For energy markets, the supply-side is proving supportive.
In the shale patch, firms have shifted their production profiles, providing tailwinds to crude oil prices as the bullish case for output growth grows more likely.
USD/CAD levels
-637327692438893281.png)
In the above 15-chart, the bulls are stepping in to defend territory towards the Feb lows target area.
A subsequent breach of the upside structure opens risk all the way back to higher.
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.
Recommended content
Editors’ Picks
EUR/USD edges lower toward 1.0700 post-US PCE
EUR/USD stays under modest bearish pressure but manages to hold above 1.0700 in the American session on Friday. The US Dollar (USD) gathers strength against its rivals after the stronger-than-forecast PCE inflation data, not allowing the pair to gain traction.
GBP/USD retreats to 1.2500 on renewed USD strength
GBP/USD lost its traction and turned negative on the day near 1.2500. Following the stronger-than-expected PCE inflation readings from the US, the USD stays resilient and makes it difficult for the pair to gather recovery momentum.
Gold struggles to hold above $2,350 following US inflation
Gold turned south and declined toward $2,340, erasing a large portion of its daily gains, as the USD benefited from PCE inflation data. The benchmark 10-year US yield, however, stays in negative territory and helps XAU/USD limit its losses.
Bitcoin Weekly Forecast: BTC’s next breakout could propel it to $80,000 Premium
Bitcoin’s recent price consolidation could be nearing its end as technical indicators and on-chain metrics suggest a potential upward breakout. However, this move would not be straightforward and could punish impatient investors.
Week ahead – Hawkish risk as Fed and NFP on tap, Eurozone data eyed too
Fed meets on Wednesday as US inflation stays elevated. Will Friday’s jobs report bring relief or more angst for the markets? Eurozone flash GDP and CPI numbers in focus for the Euro.