• A combination of factors lifts USD/CAD to its highest level since June 2020 on Monday.
  • Bearish oil prices undermine the loonie and offer support amid relentless USD buying.
  • Investors look for Fedspeaks for some impetus and short-term trading opportunities.

The USD/CAD pair builds on last week's bullish breakout momentum and gains some follow-through traction on Monday. The momentum lifts spot prices to the highest level since June 2020, around the 1.3640 area during the early European session and is sponsored by a combination of factors.

Crude oil prices kick off the new week on a downbeat note and hit a fresh multi-month low amid worries that a deeper global economic downturn will hurt fuel demand. This, in turn, is seen undermining the commodity-linked loonie, which, along with relentless US dollar buying, continues to boost the USD/CAD pair.

The Fed last week delivered another supersized rate hike, as was widely anticipated, and signalled that it will likely undertake more aggressive increases at its upcoming meetings to cap inflation. The hawkish outlook remains supportive of elevated US Treasury bond yields and continues to lend support to the buck.

In fact, the yield on the rate-sensitive 2-year US government bond stands tall near a 15-year high and the benchmark 10-year Treasury hits its highest in 11 years. Apart from this, the prevalent risk-off environment is seen as another factor benefitting the safe-haven greenback and lending support to the USD/CAD pair.

The market sentiment remains fragile amid recession fears, which, along with geopolitical risk, take its toll on the global risk sentiment. The anti-risk flow is evident from a generally weaker tone around the equity markets, which favours the USD bulls and supports prospects for additional gains for the USD/CAD pair.

Market participants now look forward to speeches by influential FOMC members - Boston Fed President Susan Collins, Atlanta Fed President Raphael Bostic and Dallas Fed President Lorie Logan. This, along with the US bond yields and the broader risk sentiment, might influence the USD and provide some impetus to the USD/CAD pair. Traders will further take cues from oil price dynamics to grab short-term opportunities.

Technical levels to watch

USD/CAD

Overview
Today last price 1.3627
Today Daily Change 0.0033
Today Daily Change % 0.24
Today daily open 1.3594
 
Trends
Daily SMA20 1.3202
Daily SMA50 1.3014
Daily SMA100 1.2939
Daily SMA200 1.2811
 
Levels
Previous Daily High 1.3613
Previous Daily Low 1.3468
Previous Weekly High 1.3613
Previous Weekly Low 1.3227
Previous Monthly High 1.3141
Previous Monthly Low 1.2728
Daily Fibonacci 38.2% 1.3557
Daily Fibonacci 61.8% 1.3523
Daily Pivot Point S1 1.3504
Daily Pivot Point S2 1.3414
Daily Pivot Point S3 1.3359
Daily Pivot Point R1 1.3648
Daily Pivot Point R2 1.3703
Daily Pivot Point R3 1.3793

 

 

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

AUD/USD hovers around 0.6730 reverting its negative trend

AUD/USD hovers around 0.6730 reverting its negative trend

The AUD/USD pair bounced from a weekly low of 0.6668 and trades comfortably above the 0.6700 mark. Risk aversion did little to help the greenback as the focus remains on global economic growth and the looming Fed’s decision.

AUD/USD News

EUR/USD holds above 1.0500, lacks follow-through

EUR/USD holds above 1.0500, lacks follow-through

A risk-averse environment limited EUR/USD gains, but demand for the USD remains scarce. Buyers defending the 1.0500 area, hinting at potential higher highs in the near term.

EUR/USD News

Gold carves out a bullish scenario into key resistance

Gold carves out a bullish scenario into key resistance

Gold price is higher on the day having climbed from a low of $1,768.82 and reaching a high of $1,789.05 so far as the US Dollar tails off in the mid-afternoon session in the US.

Gold News

Ethereum price subject to volatility as Chainlink enables staking on the ETH network

Ethereum price subject to volatility as Chainlink enables staking on the ETH network

Ethereum price has investors dialing in as Network advancements are arousing speculation. Still, the technicals will need to show forth stronger signals to justify opening a long position.

Read more

What happens after the Fed reaches the terminal rate

What happens after the Fed reaches the terminal rate

The discrepancy starts to show. What will the Fed do? For now, the Fed is raising rates to stave off inflation, and are expected to level out at around 5.0%. 

Read more

Forex MAJORS

Cryptocurrencies

Signatures