USD/CAD bounds over 1.35 as Greenback pushes up across the board

The USD/CAD had cleared the 1.3500 handle in Tuesday trading.
The oil-backed Loonie is unable to find gains as the DXY captures the broader market.
US data to feature heavily in the back half of the week.

Joshua Gibson FXStreet

The USD/CAD has decisively reclaimed the 1.3500 major handle for Tuesday. The US Dollar Index (DXY) is pumping higher across the entire market, bolstered by a hawkish Fed and risk aversion taking a bite out of the market's appetite for riskier assets.

The broad US Dollar Index (DXY) is at its highest levels since last November, and the Greenback (USD) is taking a step higher. Even with oil prices rising for Tuesday which would normally prop up the Loonie (CAD), the USD is still the clear winner on the charts.

US Treasury yields are knocking on multi-year highs with the 10-year Treasury yield holding above 4.5%, pushing the USD higher. US markets are increasingly concerned about a potential US government shutdown looming, knocking risk appetite even further back.

Economic calendar: US figures in focus

On the data docket it's notably CAD-thin, leaving investors to focus almost entirely on US data for this week.

Tuesday saw US Housing Price Index figures cleanly beat expectations, printing at 0.8%, leaping over the forecast 0.5% and doubling the previous reading of 0.4%.

Wednesday will bring US Durable Goods Orders (forecast: -0.5%, previous -5.2%), and investors will be focusing on US Gross Domestic Product (GDP) figures due on Thursday. Median market forecasts are anticipating a steady print at an annualized 2.1% for the second quarter.

The trading week will close out with US Personal Consumption Expenditure (PCE) Price Index data on Friday. PCE, the Federal Reserve's (Fed) preferred US inflation measure, is expected to hold steady at 0.2% for the month of August.

A data beat could see the Greenback clear even further ground with Fed policymakers already leaning towards the potential for further rate hikes in the future if inflation refuses to bed down.

USD/CAD technical outlook

The Greenback is up 0.3% against the Loonie in Tuesday's market session, vaulting the 1.3500 mark and poised to extend further beyond the 200-hour Simple Moving Average (SMA) currently chalked in near 1.3480.

Near-term resistance is coming from last week's swing high near 1.3525, and intraday bullish momentum might find a covering pullback from here.

On the daily candlesticks, the USD/CAD is geared for a decisive split from the 200-day SMA, which has constrained price action for several days and is currently settling just north of 1.3450. An extended bull run will see the pair set for a re-challenge of early September's peak of 1.3695.

USD/CAD daily chart

USD/CAD technical levels

USD/CAD

Overview
Today last price	1.3524
Today Daily Change	0.0070
Today Daily Change %	0.52
Today daily open	1.3454

Trends
Daily SMA20	1.3545
Daily SMA50	1.3446
Daily SMA100	1.34
Daily SMA200	1.3461

Levels
Previous Daily High	1.3492
Previous Daily Low	1.3453
Previous Weekly High	1.3528
Previous Weekly Low	1.3379
Previous Monthly High	1.364
Previous Monthly Low	1.3184
Daily Fibonacci 38.2%	1.3468
Daily Fibonacci 61.8%	1.3477
Daily Pivot Point S1	1.3441
Daily Pivot Point S2	1.3428
Daily Pivot Point S3	1.3402
Daily Pivot Point R1	1.3479
Daily Pivot Point R2	1.3505
Daily Pivot Point R3	1.3518

Author

Joshua Gibson

FXStreet

Joshua joins the FXStreet team as an Economics and Finance double major from Vancouver Island University with twelve years' experience as an independent trader focusing on technical analysis.

GBP/USD surges to multi-day peaks past 1.3250

GBP/USD leaves behind Friday’s small pullback and advances past 1.3250 level, or five-day highs, on Monday. Cable’s upside follows extra losses in the Greenback, while traders continue to assess the geopolitical front and upcoming key events.

EUR/USD pops to daily highs near 1.1430

EUR/USD starts the week on a positive note, climbing to as high as the 1.1430 zone, or daily tops, on Monday. The pair’s recovery comes in response to the broad-based US Dollar weakness, while investors continue to monitor developments from the Middle East ahead of the beginning of the ECB's annual forum.

Gold remains supported by $4,000

Gold remains under marked selling pressure, holding on just above the key $4,000 mark per troy ounce at the beginning of the week. The precious metal reverses two daily advances in a row as renewed effervescence in the Middle East revive inflation concerns and bolster Fed rate hike expectations.

Bitcoin four-year cycle: BTC risks 75% drawdown with four months of bear market still ahead

Bitcoin price continues to trend downward below the $60,000 support zone after losing over 50% of its value since the $126,199 high in October. Bitcoin’s four-year cycle, measured from cycle tops to bottoms, suggests that four months of a bear market are still ahead.

Just like Fed, is BoJ’s independence under threat?

When talking about central bank independence, most of the focus has been on Donald Trump’s pressure on the Federal Reserve. But a similar story, a quieter one for now, seems to be happening on the other side of the Pacific: Japan’s government may be testing the Bank of Japan’s independence.

Kevin Warsh isn't expected to say much in Sintra: That's exactly why markets will listen

Financial markets could find an important catalyst in the enchanting, fairytale-like landscape of Sintra this week. The ECB Forum will, as it does every year, gather the crème de la crème of central banks. The new boss at the Fed, who has clearly said that the Fed should stop explaining everything, will need to talk – and traders should listen.