• USD/CAD picks up bids to reverse post-BoC losses, eyes the first weekly gain in six.
  • BoC matches market forecasts of 0.25% rate hike, but rate outlook, comments from Governor Macklem flashed mixed messages.
  • WTI crude oil fails to cheer softer US Dollar, EIA data amid fears of supply increase.
  • Slew of US data to entertain Loonie pair traders; advance readings of US Q4 GDP are key.

USD/CAD picks up bids to add to the first weekly gain in six as bulls poke 1.3400 during the early hours of Thursday’s Asian session. In doing so, the Loonie pair consolidates the post-Bank of Canada (BoC) moves amid softer Oil price and a lack of clarity on the BoC’s next moves. Adding strength to the rebound could be the cautious mood ahead of the first readings of the US fourth quarter (Q4) Gross Domestic Product (GDP).

"Prepared to increase policy rate further if needed to return inflation to 2% target; continuing the quantitative tightening program," mentioned the BoC statement after matching 0.25% rate hike expectations. However, the Canadian central bank also said it would likely hold rates at this level while assessing the impact of recent policy moves. Following that, BoC Governor Tiff Macklem shrugged off rate cut talks. Hence, mixed signals from the BoC allowed USD/CAD buyers to sneak in even if the central bank becomes the first among the majors to talk about the pause in rate lifts.

On the other hand, WTI crude oil struggles to defend $80.00 amid fears of sustained supply cuts from the global oil producers and the US readiness for more Strategic Petroleum Reserve (SPR) release if needed. On the same line could be the fading of China-linked optimism amid the Lunar New Year (LNY) holidays and a cautious mood ahead of the critical data/events. Alternatively, a smaller inventory rise in the US, per the US Energy Information Administration’s (EIA) Crude Oil Stocks Change data for the week ended on January 20, 0.533M versus 0.971M expected and 8.408M prior, as well as the softer US Dollar failed to inspire the energy bulls.

It should be noted that the market sentiment remained dicey amid a light calendar elsewhere and the lack of significant macro, amid the China holidays and the Fed blackout. Wall Street closed mixed, and the US 10-year Treasury bond yields ended Wednesday with minor moves around 3.45%. However, the US Dollar Index (DXY) remained on the back foot for the third consecutive week.

Having witnessed the BoC-led moves, the USD/CAD traders will likely see a volatile day as a slew of US data is up for release. Among them, the first reading of the US Q4 GDP will be crucial amid the recession talks and due to the next week’s Federal Open Market Committee (FOMC) meeting.

Also read: US Gross Domestic Product Preview: Three reasons to expect a US Dollar-boosting outcome

Technical analysis

USD/CAD appears clubbed between 10-week-old support and a downward-sloping resistance line from January 06, respectively, near 1.3345 and 1.3440.

Additional important levels

Overview
Today last price 1.3388
Today Daily Change 0.0016
Today Daily Change % 0.12%
Today daily open 1.3372
 
Trends
Daily SMA20 1.3467
Daily SMA50 1.3503
Daily SMA100 1.3517
Daily SMA200 1.3197
 
Levels
Previous Daily High 1.3414
Previous Daily Low 1.3347
Previous Weekly High 1.3521
Previous Weekly Low 1.3351
Previous Monthly High 1.3705
Previous Monthly Low 1.3385
Daily Fibonacci 38.2% 1.3372
Daily Fibonacci 61.8% 1.3388
Daily Pivot Point S1 1.3341
Daily Pivot Point S2 1.3311
Daily Pivot Point S3 1.3275
Daily Pivot Point R1 1.3408
Daily Pivot Point R2 1.3444
Daily Pivot Point R3 1.3475

 

 

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