• USD/CAD gained some positive traction on Monday and was supported by a combination of factors.
  • The USD witnessed some follow-through short-covering and recovered further from multi-week lows.
  • Retreating oil prices undermined the loonie and remained supportive of the intraday positive move.

The USD/CAD pair edged higher through the early European session and climbed beyond the 1.2300 round-figure mark, hitting fresh daily tops in the last hour.

A combination of factors assisted the pair to gain some positive traction on the first day of a new trading week and move away from over three-year lows, around the 1.2265 region touched on Friday. The US dollar built on last week's goodish rebound from the lowest level since February 26. Apart from this, a weaker tone around crude oil prices undermined the commodity-linked loonie and extended some support to the USD/CAD pair.

As investors looked past the Fed's dovish message last week, the USD witnessed some short-covering move and was further supported by Friday's mostly upbeat US macro releases. The US Bureau of Economic Analysis reported on Friday that the annual Core PCE Price Index accelerated to 1.8% in March from 1.4% previous. Additional details revealed that Personal Income surged surge 21.1%, while Personal Spending increases by 4.2% in March.

Meanwhile, worries that a catastrophic second wave of COVID-19 infections in India overshadowed the optimism over a strong rebound in demand across developed countries. This, in turn, acted as a headwind for the Canadian dollar and provided an additional boost to the USD/CAD pair. That said, the divergence in monetary policies adopted by the Bank of Canada and the Federal Reserve might keep a lid on any strong gains for the major.

It is worth recalling 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. This makes it prudent to wait for some strong follow-through buying before confirming that the USD/CAD pair might have already bottomed out in the near term.

Market participants now look forward to the US economic docket, highlighting the release of ISM Manufacturing PMI later during the early North American session. This will be followed by Fed Chair Jerome Powell's speech, which will play a key role in influencing the USD. Apart from this, oil price dynamics and the broader market risk sentiment should allow traders to grab some short-term opportunities around the USD/CAD pair.

Technical levels to watch

USD/CAD

Overview
Today last price 1.2304
Today Daily Change 0.0015
Today Daily Change % 0.12
Today daily open 1.2289
 
Trends
Daily SMA20 1.2488
Daily SMA50 1.2542
Daily SMA100 1.2643
Daily SMA200 1.2903
 
Levels
Previous Daily High 1.2323
Previous Daily Low 1.2266
Previous Weekly High 1.2491
Previous Weekly Low 1.2266
Previous Monthly High 1.2654
Previous Monthly Low 1.2266
Daily Fibonacci 38.2% 1.2301
Daily Fibonacci 61.8% 1.2288
Daily Pivot Point S1 1.2262
Daily Pivot Point S2 1.2236
Daily Pivot Point S3 1.2206
Daily Pivot Point R1 1.2319
Daily Pivot Point R2 1.2349
Daily Pivot Point R3 1.2376

 

 

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 extends recovery above 1.0350 ahead of EU inflation, Powell

EUR/USD extends recovery above 1.0350 ahead of EU inflation, Powell

EUR/USD is extending recovery gains above 1.0350 in the early European morning this Wednesday. The US Dollar retreats further amid a better market mood. All eyes remain on the Eurozone inflation, US ADP and Fed Chair Powell's speech. 

EUR/USD News

GBP/USD recovers from 1.1940 as US Dollar refreshes day’s low, Fed Powell’s speech eyed

GBP/USD recovers from 1.1940 as US Dollar refreshes day’s low, Fed Powell’s speech eyed

GBP/USD has sensed responsive buying action around 1.1940 as risk aversion loses luster. The Bank of England is expected to advance its interest rates to 4.25% in Q1CY2023. GBP/USD has gained strength after testing the 200-EMA around 1.1960.

GBPUSD News

Gold bulls seek validation from $1,760 and Fed Chair Powell

Gold bulls seek validation from $1,760 and Fed Chair Powell

Gold price remains firmer for the second consecutive day, bounces off 10-DMA, short-term key support. Fed Powell’s first speech after November, hawkish hopes tease Gold sellers.

Gold News

Three on-chain metrics suggest Bitcoin price has bottomed, here’s where BTC is going next

Three on-chain metrics suggest Bitcoin price has bottomed, here’s where BTC is going next

Bitcoin price action has spiked 5% over the last 24 hours, hinting at the start of an optimistic scenario. Previous publications have already explored why BTC is ready for a bear market rally from both short-term and long-term outlooks.

Read more

Eurozone Inflation Preview: EUR/USD fate hinges on confirmation of peak inflation Premium

Eurozone Inflation Preview: EUR/USD fate hinges on confirmation of peak inflation

ECB President Christine Lagarde told European lawmakers on Monday that Eurozone inflation hasn’t peaked after reaching the highest levels on record in October. Will the Preliminary Eurozone inflation print confirm a peak in inflation?

Read more

Forex MAJORS

Cryptocurrencies

Signatures