USD/CAD climbs to 1.2400 neighbourhood amid a pickup in USD demand


  • A modest USD strength assisted USD/CAD to stage a modest bounce from over three-month lows.
  • Hawkish Fed expectations elevated US bond yields, the cautious marked mood benefitted the USD.
  • Bullish crude oil prices might underpin the loonie and keep a lid on any meaningful gains for the pair.

The USD/CAD pair bounced around 40 pips from the Asian session lows and was last seen hovering near the top end of its intraday trading range, around the 1.2385-90 region.

Having shown some resilience below mid-1.2300s, the USD/CAD pair attracted some buying on the first day of a new week and for now, seems to have snapped four successive days of the losing streak. The uptick allowed the pair to move away from over three-month lows touched on Friday and was sponsored by a modest US dollar strength.

The USD drew some support from elevated US Treasury bond yields, which remained well supported by the prospects for an early policy tightening by the Fed. The market expectations were reaffirmed by Friday's upbeat US monthly Retail Sales figures, while unexpectedly rose 0.7% in September as against a 0.2% decline anticipated.

The markets also seem to have started pricing in the possibility of an interest rate hike in 2022 amid worries that the recent widespread rally in commodity prices will stoke inflation. Apart from this, the prevalent cautious mood around the equity markets was seen as another factor that benefitted the greenback's safe-haven status.

Against the backdrop of fears about a faster than expected rise in inflation, a sharp deceleration in the Chinese economic growth fueled concerns about the return of stagflation. In fact, the world's second-largest economy recorded a modest 0.2% growth during the third quarter and the yearly rate fell to 4.9% from 7.9% previous.

This, in turn, kept a lid on the optimism and dented investors' appetite for perceived riskier assets. That said, an extension of the recent bullish run in crude oil prices to fresh multi-year tops might continue to underpin the commodity-linked loonie. This, in turn, should keep a lid on any strong gains for the USD/CAD pair.

Market participants now look forward to the release of US Industrial Production data for some impetus later during the early North American session. This, along with US bond yields, might influence the greenback. Traders will further take cues from oil price dynamics for some short-term opportunities around the USD/CAD pair.

Technical levels to watch

USD/CAD

Overview
Today last price 1.2383
Today Daily Change 0.0020
Today Daily Change % 0.16
Today daily open 1.2363
 
Trends
Daily SMA20 1.2602
Daily SMA50 1.2618
Daily SMA100 1.25
Daily SMA200 1.2507
 
Levels
Previous Daily High 1.2397
Previous Daily Low 1.2337
Previous Weekly High 1.2498
Previous Weekly Low 1.2337
Previous Monthly High 1.2896
Previous Monthly Low 1.2494
Daily Fibonacci 38.2% 1.236
Daily Fibonacci 61.8% 1.2374
Daily Pivot Point S1 1.2334
Daily Pivot Point S2 1.2305
Daily Pivot Point S3 1.2273
Daily Pivot Point R1 1.2394
Daily Pivot Point R2 1.2426
Daily Pivot Point R3 1.2455

 

 

Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers. The author will not be held responsible for information that is found at the end of links posted on this page.

If not otherwise explicitly mentioned in the body of the article, at the time of writing, the author has no position in any stock mentioned in this article and no business relationship with any company mentioned. The author has not received compensation for writing this article, other than from FXStreet.

FXStreet and the author do not provide personalized recommendations. The author makes no representations as to the accuracy, completeness, or suitability of this information. FXStreet and the author will not be liable for any errors, omissions or any losses, injuries or damages arising from this information and its display or use. Errors and omissions excepted.

The author and FXStreet are not registered investment advisors and nothing in this article is intended to be investment advice.

Feed news

Latest Forex News


Latest Forex News

Editors’ Picks

EUR/USD rebounds to 1.1350 on modest dollar weakness

EUR/USD regained its traction after declining toward 1.1320 during the European session and rose to 1.1350 area. The dollar's is facing modest selling pressure amid falling US Treasury bond yields and allowing the pair to continue to edge higher ahead of the weekend.

EUR/USD News

GBP/USD struggles to pull away from 10-day low set near 1.3550

GBP/USD fell toward 1.3550 on Friday and touched its weakest level in 10 days. Although the US Dollar Index stays in the negative territory in the early American session, the risk-averse market environment doesn't allow the pair to stage a convincing recovery.

GBP/USD News

Gold reclaims $1,840 amid falling US T-bond yields

Gold reversed its direction after testing $1,830 earlier in the day and turned positive on the day above $1,840. The benchmark 10-year US Treasury bond yield is losing more than 3% at 1.75%, fueling XAU/USD's rebound.

Gold News

BTC may capitulate to $30,000

Bitcoin price has dropped considerably over the last three weeks. The recent downswing has made things worse for BTC and hints that a steep correction could be on its way.

Read more

Will the Netflix stock price rebound?

Netflix stock edged down after better than expected Q4 results. Will the Netflix stock price rebound? Expectations of rising subscription and higher prices are bullish for Netflix stock price.

Read more

Forex MAJORS

Cryptocurrencies

Signatures