- A combination of factors assisted USD/CAD to gain traction for the second successive day.
- Sliding oil prices undermined the loonie and remained supportive amid a modest USD strength.
- Investors eye US Retail Sales and the Fed Chair Powell’s speech for a fresh trading impetus.
The USD/CAD pair added to its intraday gains and shot to near four-week tops, around the 1.2630 region during the early European session.
The pair built on the previous day's positive move and gained some follow-through traction for the second consecutive session on Tuesday. The momentum pushed the USD/CAD pair further beyond the very important 200-day SMA and was supported by a combination of factors.
Investors remain worried that the fast-spreading Delta variant of the coronavirus could derail the global economic recovery and dent fuel demand. This was evident from the recent decline in crude oil prices, which, in turn, undermined the commodity-linked loonie.
Apart from COVID-19 jitters, political tension in Afghanistan took its toll on the global risk sentiment. This was seen as a key factor that drove some haven flows towards the US dollar and further contributed to the USD/CAD pair's ongoing positive move.
The uptick could further be attributed to some short-covering above a technically significant moving average. A subsequent strength beyond the 1.2600 round-figure mark might have already set the stage for a further near-term appreciating move for the USD/CAD pair.
Market participants now look forward to the release of US monthly Retail Sales figures. This will be followed by Fed Chair Jerome Powell's speech, which might influence the USD. Apart from this, oil price dynamics will provide some trading impetus to the USD/CAD pair.
Technical levels to watch
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.
Recommended content
Editors’ Picks
EUR/USD hovers around 1.0700 ahead of German IFO survey
EUR/USD is consolidating recovery gains at around 1.0700 in the European morning on Wednesday. The pair stays afloat amid strong Eurozone business activity data against cooling US manufacturing and services sectors. Germany's IFO survey is next in focus.
USD/JPY refreshes 34-year high, attacks 155.00 as intervention risks loom
USD/JPY is renewing a multi-decade high, closing in on 155.00. Traders turn cautious on heightened risks of Japan's FX intervention. Broad US Dollar rebound aids the upside in the major. US Durable Goods data are next on tap.
Gold: Defending $2,318 support is critical for XAU/USD
Gold price is nursing losses while holding above $2,300 early Wednesday, stalling its two-day decline, as traders look forward to the mid-tier US economic data for fresh cues on the US Federal Reserve interest rates outlook.
Worldcoin looks set for comeback despite Nvidia’s 22% crash Premium
Worldcoin (WLD) price is in a better position than last week's and shows signs of a potential comeback. This development occurs amid the sharp decline in the valuation of the popular GPU manufacturer Nvidia.
Three fundamentals for the week: US GDP, BoJ and the Fed's favorite inflation gauge stand out Premium
While it is hard to predict when geopolitical news erupts, the level of tension is lower – allowing for key data to have its say. This week's US figures are set to shape the Federal Reserve's decision next week – and the Bank of Japan may struggle to halt the Yen's deterioration.