USD/CAD climbs further beyond 1.2700, two-week high ahead of US CPI/Canadian jobs data

USD/CAD scaled higher for the third straight day and shot to a fresh two-week high on Friday.
Softer oil prices undermined the loonie and extended support, despite subdued USD demand.
Traders await the US CPI report and Canadian monthly jobs data for a fresh directional impetus.

Haresh Menghani FXStreet

The USD/CAD pair built on the previous day's strong move-up and gained some follow-through traction for the third successive day on Friday. The momentum lifted spot prices to a fresh two-week high, around the 1.2720-1.2725 region during the first half of the European session.

The new mini-lockdown in Shanghai - China’s biggest city and a global financial hub - renewed worries about fuel demand and dragged crude oil prices away from a three-month high touched on Wednesday. This, in turn, undermined the commodity-linked loonie and was seen as a key factor that assisted the USD/CAD pair to prolong this week's goodish rebound from its lowest level since April 21.

On the other hand, the US dollar was seen consolidating near a three-week top and failed to provide any meaningful impetus to the USD/CAD pair. That said, elevated US Treasury bond yields, along with the prevalent cautious market mood, acted as a tailwind for the safe-haven buck. The yield on the benchmark 10-year US government bond held steady above 3.0% amid hawkish Fed expectations.

Investors remain concerned that the global supply chain disruption caused by the Russia-Ukraine war and COVID-19 restriction in China would push consumer prices even higher. This might force the US central bank to tighten its monetary policy at a faster pace, which remained supportive of the recent runup in the US bond yields. Hence, the focus will remain on the US consumer inflation figures.

The crucial US CPI report should play a key role in determining the Fed's policy tightening path and influence the near-term USD price dynamics. Investors will also take cues from the simultaneous release of the monthly Canadian employment details later during the early North American session. Apart from this, oil price dynamics would provide a fresh directional impetus to the USD/CAD pair.

Technical levels to watch

USD/CAD

Overview
Today last price	1.2724
Today Daily Change	0.0025
Today Daily Change %	0.20
Today daily open	1.2699

Trends
Daily SMA20	1.2727
Daily SMA50	1.2722
Daily SMA100	1.2703
Daily SMA200	1.2662

Levels
Previous Daily High	1.2705
Previous Daily Low	1.2549
Previous Weekly High	1.2714
Previous Weekly Low	1.2551
Previous Monthly High	1.3077
Previous Monthly Low	1.2629
Daily Fibonacci 38.2%	1.2645
Daily Fibonacci 61.8%	1.2609
Daily Pivot Point S1	1.2597
Daily Pivot Point S2	1.2495
Daily Pivot Point S3	1.2441
Daily Pivot Point R1	1.2753
Daily Pivot Point R2	1.2807
Daily Pivot Point R3	1.2909

Author

Haresh Menghani

FXStreet

Haresh Menghani is a detail-oriented professional with 10+ years of extensive experience in analysing the global financial markets.

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