• 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


Today last price 1.2383
Today Daily Change 0.0020
Today Daily Change % 0.16
Today daily open 1.2363
Daily SMA20 1.2602
Daily SMA50 1.2618
Daily SMA100 1.25
Daily SMA200 1.2507
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 Join Telegram

Recommended content

Recommended content

Editors’ Picks

EUR/USD consolidates below 1.0450 after weak EU data

EUR/USD consolidates below 1.0450 after weak EU data

EUR/USD keeps its range below 1.0450 after softer Eurozone PPI and Sentix data. The US dollar struggles to find its feet amid a better risk tone and light trading conditions. Recession fears and Fed-ECB policy contrast continue to remain in play. 


GBP/USD defends bids above 1.2100 amid fresh UK political jitters

GBP/USD defends bids above 1.2100 amid fresh UK political jitters

GBP/USD is defending minor bids above 1.2100, as investors weigh another attempt to oust UK PM Johnson amid looming Brexit woes. The US dollar eases in a mildly positive risk environment. Thinner liquidity conditions will prevail amid the US holiday. 


Gold eyes $1,798 and $1,794 as next downside targets

Gold eyes $1,798 and $1,794 as next downside targets

Gold Price returns to the red zone despite weaker US Treasury yields. Markets remain cautious ahead of the Fed Minutes and an impending death cross. XAUUSD could resume sell-off below $1,800 amid light trading conditions.

Gold News

Cryptos at risk following KuCoin insolvency rumors

Cryptos at risk following KuCoin insolvency rumors

Bitcoin price has been ranging since June 18, but rumors of insolvency have been spreading on multiple popular platforms in the industry. KuCoin is at the center of bankruptcy rumors. 

Read more

FXStreet Premium users exceed expectations

FXStreet Premium users exceed expectations

Tap into our 20 years Forex trading experience and get ahead of the markets. Maximize our actionable content, be part of our community, and chat with our experts. Join FXStreet Premium today!