|

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.

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 price1.2724
Today Daily Change0.0025
Today Daily Change %0.20
Today daily open1.2699
 
Trends
Daily SMA201.2727
Daily SMA501.2722
Daily SMA1001.2703
Daily SMA2001.2662
 
Levels
Previous Daily High1.2705
Previous Daily Low1.2549
Previous Weekly High1.2714
Previous Weekly Low1.2551
Previous Monthly High1.3077
Previous Monthly Low1.2629
Daily Fibonacci 38.2%1.2645
Daily Fibonacci 61.8%1.2609
Daily Pivot Point S11.2597
Daily Pivot Point S21.2495
Daily Pivot Point S31.2441
Daily Pivot Point R11.2753
Daily Pivot Point R21.2807
Daily Pivot Point R31.2909

Author

Haresh Menghani

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

More from Haresh Menghani
Share:

Editor's Picks

AUD/USD rises to 0.6950 as USD slips on Fed's Warsh

AUD/USD regains traction and extends the bounce toward 0.6950 in the Asian session on Friday. Fed Chair Warsh's comments reinforce the selling pressure on the US Dollar, allowing the pair to stretch higher. Warsh said that he remains committed to delivering price stability without giving away anything on future interest rate path.

USD/JPY falls in symc with USD, gives up 158.00 after Warsh's speech

USD/JPY has come under fresh selling pressure and gives up 158.00 in the Asian session on Friday amid the emergence of fresh US Dollar selling. Fed Chair Warsh's non-committal commentary on the future tightening path, weighs on the US Dollar and the pair.

Gold looks vacillating above $4,150

Gold alternates gains with losses below the key $4,200 mark per troy ounce on Friday. The yellow metal’s irresolute price action comes in response to a modest pullback in the US Dollar and a tepid recovery in US Treasury yields across the board.

Bitcoin steadies at $82,000: The five forces crushing the Uptober rally

Crypto markets have remained under pressure so far in October, with Bitcoin (BTC) sliding below $80,000 earlier this week before recovering to around $82,000 on Friday, as macroeconomic headwinds and cooling demand weigh on the market.

The Fed just got a second hot inflation number. Here's what the diesel signal is really saying
The Federal Reserve (Fed) faces a renewed inflation challenge after two consecutive reports showed price pressure intensifying across the US economy. September's Consumer Price Index (CPI) confirmed accelerating consumer inflation, while the Producer Price Index (PPI) revealed an even sharper rise in business costs. Behind both reports lies a common factor: energy prices.
Everyone's dumping Gold after hot US inflation. Here's why $4,100 could be a floor, not a cliff
Gold (XAU/USD) is recovering from a sharp sell-off triggered by hotter-than-expected United States (US) inflation data released on Wednesday. The precious metal briefly plunged toward $4,073 as investors increased their bets on further Federal Reserve (Fed) interest rate hikes before recovering as US Treasury yields and the US Dollar (USD) reversed their initial gains.