- Drops in tandem with DXY.
- 5-DMA support at 1.2714 breached.
- WTI consolidates near 2-week lows.
- Awaits US CPI, retail sales data for fresh impetus.
The USD/CAD pair failed to sustain the recovery attempts, as the sellers continued to lurk, knocking-off the rates back towards 1.27 handle.
USD/CAD tracks USD price-action
The US dollar continues to face heavy selling pressure, capping every recovery attempted by USD/CAD near 1.2730, as Treasury yields meet fresh supply and extend losses on speculation that today’s disappointing US CPI and retail sales release could weigh heavily on the 90% odds of a Dec Fed rate hike.
Moreover, the latest remarks from the Chicago Fed President Evans also added to the bearish bias seen in the US dollar across its main peers. The sentiment around the US dollar and Treasury yields remains undermined by the uncertainty surrounding the US tax reforms.
Meanwhile, the Loonie remains well bid, despite stalled recovery seen in oil prices, as the sentiment remains exclusively driven by the USD dynamics. The oil-price recovery lost steam over the last hours, as the latest IEA forecasts combined with bearish API crude inventory report continue to weigh on the black gold.
Next of note for the major remains the US CPI and retail sales data, which is expected to have a significant impact on the USD moves and Fed rate hike expectations.
USD/CAD Levels to consider
On the topside, resistances are aligned at 1.2766 (20-DMA), 1.2800 (round number) and 1.2821 (Nov 7 high). On the flipside, the pair finds the immediate support at 1.2700, below which a test of 1.2665 (classic S2/ Fib S3) is likely, opening floors towards the 50-DMA support of 1.2589.
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