USD/CAD consolidates below 1.2100 ahead of US PCE data, budget proposal

USD/CAD gains momentum in the early European sessions
Firm US Treasury yields lift demand for the US dollar.
Rising commodity prices support loonie.

Rekha Chauhan Independent Analyst

The buying opportunities in the US dollar pushed USD/CAD higher on Friday. The pair opened lower, albeit recovered swiftly to the session’s high at 1.2089 while comprising a 30-pip movement.

At the time of writing, the USD/CAD pair is trading at 1.2088, up 0.2% for the day.

The US Dollar Index (DXY), which indicates the performance of the greenback against six majors, rose from 4-month lows and stood at 90.04 with 0.14% gains. The US 10-year benchmark rose to 1.61% with 0.4% gains for the day.

The upbeat labor market data with weekly Initial Jobless Claims falling to 406K, well below the market expectation of 426K, lifted market sentiment.

Meanwhile, US President Joe Biden proposes a $6 trillion US budget for the 2022 fiscal year. However, US Treasury Secretary Jenet Yellen urged a more expansive fiscal policy and not to burden the next generation with taxes.

On the other hand, the Canadian dollar is supported by steady crude oil prices. On the economic data front, Manufacturing Sales retreated by 1.1% in April.

For now, traders are gearing up for a slew of economic data releases: US Personal Income/Spending Data, Goods Trade Balance, Personal Consumption Expenditure, Chicago PMI and Michigan Consumer Expectations.

If PCE data align with the Fed's ambitious inflation target of 2%, then it might prompt policymakers to tweak their accommodative policy sooner than expected.

USD/CAD Additional Levels

USD/CAD

Overview
Today last price	1.2088
Today Daily Change	0.0023
Today Daily Change %	0.19
Today daily open	1.2065

Trends
Daily SMA20	1.2136
Daily SMA50	1.237
Daily SMA100	1.252
Daily SMA200	1.2791

Levels
Previous Daily High	1.2142
Previous Daily Low	1.2057
Previous Weekly High	1.2144
Previous Weekly Low	1.2013
Previous Monthly High	1.2654
Previous Monthly Low	1.2266
Daily Fibonacci 38.2%	1.2089
Daily Fibonacci 61.8%	1.2109
Daily Pivot Point S1	1.2034
Daily Pivot Point S2	1.2002
Daily Pivot Point S3	1.1948
Daily Pivot Point R1	1.2119
Daily Pivot Point R2	1.2173
Daily Pivot Point R3	1.2205

Author

Rekha Chauhan

Independent Analyst

Rekha Chauhan has been working as a content writer and research analyst in the forex and equity market domain for over two years.

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