• 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 stays under bearish pressure, closes in on 1.0500

EUR/USD stays under bearish pressure, closes in on 1.0500

EUR/USD has extended its daily slide in the American session and declined below 1.0530. The one-year inflation expectations of the Conference Board's Consumer Confidence Survey climbed to 8% in June from 7.5% in May, providing a boost to the greenback. 

EUR/USD News

GBP/USD continues to push lower toward 1.2200

GBP/USD continues to push lower toward 1.2200

GBP/USD has turned south in the American session and slid toward 1.2200. The US Dollar Index extended its daily rally toward 104.50 after the latest US data on Tuesday, forcing the pair to stay under bearish pressure. 

GBP/USD News

Gold continues to fluctuate in tight range above $1,820

Gold continues to fluctuate in tight range above $1,820

Gold is having a difficult time making a decisive move in either direction on Tuesday and fluctuating in a narrow range above $1,820. As investors assess the latest data releases from the US, the 10-year US T-bond yield clings to modest gains above 3.2%.

Gold News

Former Ripple CTO is dumping millions of XRP, traders beware

Former Ripple CTO is dumping millions of XRP, traders beware

XRP price shows promise that it is ready to trigger a massive run-up as the first half of the year comes to an end. There are three reasons why investors should be bullish on Ripple.

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