• The emergence of aggressive USD dip-buying assisted USD/CAD to pare its intraday losses.
  • Bullish crude oil prices continued underpinning the loonie and caped any meaningful upside.
  • Investors now look forward to the US economic data for some short-term trading impetus.

The USD/CAD pair was last seen trading just below the mid-1.2800s, down over 0.25% for the day, but recovering a little now from the over two-week lows touched earlier this Tuesday.

Bullish crude oil prices underpinned the commodity-linked loonie and dragged the USD/CAD pair lower for the third successive day. G7 leaders agreed to explore price caps on imports of Russian oil and gas, fueling supply concerns. Apart from this, the easing of COVID-19 curbs in China lifted hopes for demand recovery and lifted crude oil prices to a one-week high.

On the other hand, the US dollar made a solid comeback and snapped a two-day losing streak to over a one-week low amid a goodish pickup in the US Treasury bond yields. This, in turn, assisted the USD/CAD pair to find decent support near the 1.2820-1.2815 region and stall its intraday bearish trajectory, though any meaningful upside still seems elusive.

Investors turned optimistic amid hopes that inflation is nearing its peak, which was evident from the prevalent risk-on mood around the equity markets. The softening inflation expectations also seem to have forced investors to scale back their expectations for a more aggressive policy tightening by the Fed, which might keep a lid on any further gains for the buck.

Hence, it will be prudent to wait for strong follow-through buying before confirming that the recent pullback from the YTD peak has run its course and placing fresh bullish bets around the USD/CAD pair. Market participants now look forward to the US economic docket - featuring the release of the Conference Board's Consumer Confidence Index and Richmond Manufacturing Index.

The data, along with the US bond yields and the broader market risk sentiment, will drive the USD demand and provide some impetus to the USD/CAD pair. Traders will further take cues from oil price dynamics to grab short-term opportunities around the major. The focus, however, would remain on the OPEC+ meeting and Fed Chair Jerome Powell's appearance on Wednesday.

Technical levels to watch


Today last price 1.2844
Today Daily Change -0.0035
Today Daily Change % -0.27
Today daily open 1.2879
Daily SMA20 1.2798
Daily SMA50 1.2807
Daily SMA100 1.2732
Daily SMA200 1.2678
Previous Daily High 1.2916
Previous Daily Low 1.2865
Previous Weekly High 1.3039
Previous Weekly Low 1.289
Previous Monthly High 1.3077
Previous Monthly Low 1.2629
Daily Fibonacci 38.2% 1.2884
Daily Fibonacci 61.8% 1.2897
Daily Pivot Point S1 1.2857
Daily Pivot Point S2 1.2835
Daily Pivot Point S3 1.2805
Daily Pivot Point R1 1.2909
Daily Pivot Point R2 1.2939
Daily Pivot Point R3 1.2961



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