• A combination of factors assisted USD/CAD to regain strong positive traction on Wednesday.
  • A slump in oil prices undermined the loonie and extended support amid modest USD strength.
  • Hotter-than-expected Canadian CPI failed to provide any impetus ahead of Powell’s testimony.

The USD/CAD pair maintained its bid tone through the early North American session and was last seen trading around the 1.2980 region, just a few pips below the daily high. Spot prices moved little and largely shrugged off stronger Canadian consumer inflation figures.

Statistics Canada reported that the headline CPI climbed 1.4% in May as against the 0.6% previous and a reading of 1.0% estimated. Adding to this, the yearly rate also surpassed expectations and accelerated to 7.7% in May, or the highest level in nearly 40 years. More importantly, the Bank of Canada's Core CPI, which excludes volatile food and energy prices, rose 0.8% MoM and to 6.1% on yearly basis.

The data reaffirmed bets for a 75 bps rate hike move at the upcoming BoC meeting on July 13, though did little to provide any meaningful impetus to the Canadian dollar. An intraday slump in crude oil prices, down nearly 5% for the day, continued undermining the commodity-linked loonie. Apart from this, modest US dollar strength further acted as a tailwind for the USD/CAD pair, at least for now.

The USD continued drawing support from growing acceptance that the Fed would hike interest rates at a faster pace to combat stubbornly high inflation. Hence, the market focus will remain glued to Fed Chair Jerome Powell's testimony before the Senate Banking Committee. Investors will look for fresh clues about the Fed's policy tightening path, which will drive the USD in the near term.

Traders will further take cues from oil price dynamics to grab short-term opportunities around the USD/CAD pair. Meanwhile, the fundamental backdrop seems tilted in favour of bulls and supports prospects for additional gains. That said, it would be prudent to wait for sustained strength beyond the 1.3000 psychological mark before positioning for any further appreciating move.

Technical levels to watch

USD/CAD

Overview
Today last price 1.298
Today Daily Change 0.0055
Today Daily Change % 0.43
Today daily open 1.2925
 
Trends
Daily SMA20 1.2761
Daily SMA50 1.2781
Daily SMA100 1.2722
Daily SMA200 1.2674
 
Levels
Previous Daily High 1.2988
Previous Daily Low 1.2906
Previous Weekly High 1.3079
Previous Weekly Low 1.2774
Previous Monthly High 1.3077
Previous Monthly Low 1.2629
Daily Fibonacci 38.2% 1.2937
Daily Fibonacci 61.8% 1.2956
Daily Pivot Point S1 1.2891
Daily Pivot Point S2 1.2858
Daily Pivot Point S3 1.281
Daily Pivot Point R1 1.2973
Daily Pivot Point R2 1.3021
Daily Pivot Point R3 1.3055

 

 

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 rebounds, steadies above 1.0400

EUR/USD rebounds, steadies above 1.0400

EUR/USD has staged a rebound and reclaimed 1.0400 during the American trading hours on Friday with the US Dollar Index retreating from the multi-week high it set at above 105.60. Nevertheless, the pair remains on track to close the week in negative territory. 

EUR/USD News

GBP/USD climbs to 1.2050 area, looks to post weekly losses

GBP/USD climbs to 1.2050 area, looks to post weekly losses

GBP/USD reversed its direction and advanced to the 1.2050 area after having dropped to 1.1976 earlier in the day. The pair is still down more than 1% on the day with safe-haven flows dominating the financial markets following the disappointing PMI data from the US.

GBP/USD News

Gold rebounds above $1,800 as US yields fall sharply

Gold rebounds above $1,800 as US yields fall sharply

Gold has regained its traction and recovered above $1,800 after having slumped to a multi-month low below $1,790. Following the dismal PMI data from the US, the benchmark 10-year US Treasury bond yield is down more than 6% on the day, fueling XAU/USD's rebound.

Gold News

Why traders are rushing to exit positions on Cardano’s ADA price

Why traders are rushing to exit positions on Cardano’s ADA price

Cardano (ADA) price has had its performance review as the summer kicks off. ADA bulls are returning home with not-that-good a scorecard, and the underperformance could cut short holiday funding for the cryptocurrency.

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!

BECOME PREMIUM

Forex MAJORS

Cryptocurrencies

Signatures