USD/CAD clings to gains near session tops, above 1.2300 mark

  • USD/CAD regained positive traction on Tuesday amid a broad-based USD strength.
  • Bullish crude oil prices underpinned the loonie and kept a lid on any further gains.

The intraday USD buying picked up pace during the early European session and pushed the USD/CAD pair back above the 1.2300 mark. The pair was last seen trading with gains of around 0.30%, with bulls still awaiting a sustained move beyond the 1.2320 supply zone.

The pair, so far, has struggled to register any meaningful recovery and has been oscillating in a range over the past four trading sessions. The divergence in monetary policies adopted by the BoC and the Fed was seen as a key factor that continued acting as a headwind for the USD/CAD pair.

It is worth mentioning that the BoC reduced its weekly asset purchases at the April policy meeting and brought forward the guidance for the first interest rate hike to the second half of 2022. Conversely, the Fed remains firm to maintain the current accommodative monetary policy.

That said, speculations that positive economic data may force the Fed to raise interest rates sooner rather than later allowed the US dollar to regain positive traction on Tuesday. Apart from this, a softer risk tone benefitted the safe-haven USD and provided a modest lift to the USD/CAD pair.

The supporting factor, to some extent, was offset by bullish crude oil prices, which underpinned the commodity-linked loonie and kept a lid on any strong gains for the USD/CAD pair. This makes it prudent to wait for some strong follow-through buying before positioning for any further recovery.

Market participants now look forward to the release of second-tier US macro data – Trade Balance and Factory Orders. Canadian economic docket features Building Permits and Trade Balance data. This, along with oil price dynamics, might produce some trading opportunities around the USD/CAD pair.

Technical levels to watch


Today last price 1.2312
Today Daily Change 0.0031
Today Daily Change % 0.25
Today daily open 1.2281
Daily SMA20 1.2476
Daily SMA50 1.2535
Daily SMA100 1.2638
Daily SMA200 1.2897
Previous Daily High 1.2319
Previous Daily Low 1.2267
Previous Weekly High 1.2491
Previous Weekly Low 1.2266
Previous Monthly High 1.2654
Previous Monthly Low 1.2266
Daily Fibonacci 38.2% 1.2287
Daily Fibonacci 61.8% 1.2299
Daily Pivot Point S1 1.2259
Daily Pivot Point S2 1.2237
Daily Pivot Point S3 1.2207
Daily Pivot Point R1 1.2311
Daily Pivot Point R2 1.2341
Daily Pivot Point R3 1.2363



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