USD/CAD bulls attack 1.3700 as yields underpin US Dollar rebound, Oil drops


  • USD/CAD picks up bids to reverse the week-start losses.
  • US Dollar benefits from the BOJ-inflicted losses in bond, stock markets.
  • Oil price weaken amid economic fears surrounding China.
  • Canada Retail Sales, US housing data eyed for fresh impulse.

USD/CAD clings to mild gains around 1.3700 as the US Dollar reverses the intraday losses heading into Tuesday’s European session. The Loonie pair’s run-up could also be linked to the downside move of Canada’s main export item, namely WTI crude oil.

That said, the US Dollar Index (DXY) picks up bids to pare recent losses around 104.50 as the Treasury bond yields rally on the Bank of Japan’s (BOJ) surprise. Recently, the BOJ tweaked its policy to widen the Yield Curve Control (YCC) measures while keeping the monetary policy unchanged.

Also underpinning the US Dollar’s latest rebound could be the economic fears surrounding China, as well as the globe. Behind the moves could be the World Bank’s cut in China’s economic forecasts as well as the hawkish actions of the major central banks to tame inflation, especially when the recession fears are already looming.

However, comparatively less hawkish comments from the Fed officials join softer US PMIs to challenge DXY bulls.

Elsewhere, WTI takes offers to refresh intraday low near $75.50, down half a percent at the latest. The European leaders’ agreement on the oil price cap for Russian energy exports also seems to exert downside pressure on the black gold prices.

Amid these plays, S&P 500 Futures and the Asia-Pacific stocks print losses while the US 10-year Treasury yields rise for the third consecutive day to refresh the monthly peak near 3.70%, at 3.67% by the press time.

Looking forward, the risk-aversion wave may help USD/CAD buyers ahead of the Canadian Retail Sales for October, expected -0.3% versus 0.5% prior. On the other hand, US Building Permits and Housing Starts for November may also direct short-term pair moves.

Technical analysis

A daily closing beyond the 1.3700 hurdle, comprising multiple tops marked in the last two weeks, becomes necessary for the USD/CAD bulls to aim for the previous monthly high near 1.3810. Otherwise, a pullback towards the 50-DMA support of 1.3557 can’t be ruled out.

Additional important levels

Overview
Today last price 1.3695
Today Daily Change 0.0039
Today Daily Change % 0.29%
Today daily open 1.3656
 
Trends
Daily SMA20 1.3538
Daily SMA50 1.356
Daily SMA100 1.3378
Daily SMA200 1.3077
 
Levels
Previous Daily High 1.3698
Previous Daily Low 1.3623
Previous Weekly High 1.3705
Previous Weekly Low 1.3518
Previous Monthly High 1.3808
Previous Monthly Low 1.3226
Daily Fibonacci 38.2% 1.3652
Daily Fibonacci 61.8% 1.367
Daily Pivot Point S1 1.362
Daily Pivot Point S2 1.3584
Daily Pivot Point S3 1.3545
Daily Pivot Point R1 1.3695
Daily Pivot Point R2 1.3734
Daily Pivot Point R3 1.377

 

 

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