|

USD/CAD consolidates in a range around 1.3000 mark

  • USD/CAD remained confined in a narrow band on the last trading day of the week.
  • A softer USD failed to assist the pair to capitalize on this week’s attempted recovery.
  • A sharp pullback in oil prices undermined the loonie and helped limit the downside.

The USD/CAD pair lacked any firm directional bias on Friday and seesawed between tepid gains/minor losses, around the key 1.3000 psychological mark through the early European session.

A combination of diverging forces failed to provide any meaningful impetus or assist the pair to capitalize on this week's recovery move from the 1.2895 region. A softer tone surrounding the US dollar was largely offset by a sharp pullback in crude oil prices, which tend to undermine the commodity-linked loonie. This, in turn, led to the USD/CAD pair's subdued/range-bound price action on the last day of the week.

The optimism over a potential vaccine for the highly contagious coronavirus disease continued boosting investors' confidence and undermined the greenback's relative safe-haven status. Adding to this, reviving hopes for additional US fiscal stimulus measures and a fresh leg down in the US Treasury bond yields exerted some additional pressure on the buck. This was seen as one of the key factors capping the upside for the USD/CAD pair.

The downside, however, remained cushioned amid the emergence of some heavy selling in the oil markets. In fact, WTI crude oil retreated further from the highest level since March and was down over 2% on Friday amid concerns about oversupply ahead of the OPEC+ ministers meeting on Monday. The group is planning to ease this year's record supply cuts and could possibly move ahead with its plan to raise output by 2 million barrels per day in January.

Meanwhile, the USD/CAD pair's inability to gain any follow-through traction warrants some caution before positioning for any further near-term appreciating move. That said, investors might still refrain from positioning for any big moves in either direction amid absent relevant market-moving economic releases, either from the US or Canada.

Technical levels to watch

USD/CAD

Overview
Today last price1.301
Today Daily Change-0.0010
Today Daily Change %-0.08
Today daily open1.302
 
Trends
Daily SMA201.3092
Daily SMA501.3184
Daily SMA1001.3235
Daily SMA2001.3529
 
Levels
Previous Daily High1.3023
Previous Daily Low1.299
Previous Weekly High1.3142
Previous Weekly Low1.3034
Previous Monthly High1.339
Previous Monthly Low1.3081
Daily Fibonacci 38.2%1.301
Daily Fibonacci 61.8%1.3003
Daily Pivot Point S11.2999
Daily Pivot Point S21.2979
Daily Pivot Point S31.2967
Daily Pivot Point R11.3031
Daily Pivot Point R21.3043
Daily Pivot Point R31.3063

Author

Haresh Menghani

Haresh Menghani is a detail-oriented professional with 10+ years of extensive experience in analysing the global financial markets.

More from Haresh Menghani
Share:

Editor's Picks

AUD/USD climbs toward 0.7000 after strong China data dump

AUD/USD attracts follow-through buyers for the second straight day on Monday, extending last week's recovery toward 0.7000 in Monday's Asian trading. Strong Chniese Q3 GDP and activity data for September strengthen the pair's advance, following RBA Assistant Governor Chris Kent's hawkish remarks.

USD/JPY struggles near 158.00 amid hawkish BoJ, subdued USD

USD/JPY remains defensive near 158.00 in the Asian session on Monday, as the US Dollar remains depressed near a two-week low amid the recent decline in US bond yields. Furthermore, looming intervention risks underpin the Japanese Yen and weigh on the pair amid BoJ Governor Kazuo Ueda's hawkish remarks. However, Fed rate-hike bets and geopolitical uncertainties could limit USD losses and the major.

Gold rangebound as easing October Fed bets clash with firm December hike pricing

Gold attracts some buyers at the start of a new week, though it lacks bullish conviction and remains below the $4,200 mark. US Federal Reserve Chair Kevin Warsh’s unwillingness to provide any cues on further policy moves led to a reduction in odds for policy tightening later this month. Moreover, the recent sharp retracement slide in US government bond yields from multi-year highs, which dragged the US Dollar to a two-week low, acts as a tailwind for the bullion.

Cardano risks 15% downside as retail demand, bullish momentum wane

Cardano (ADA) is trading above $0.2200 at press time on Monday, holding steady after a 12% decline the previous week. The altcoin is losing retail interest as the notional value of active ADA futures positions declines. The technical outlook for ADA suggests a downside bias following the bearish breakout below a near-term support trendline last week.

What to expect in the week ahead
Investors are still digesting last week’s price action as we start a new week. US stocks sold off sharply, with the Swiss and UK indices attracting inflows as tech sold off. Sovereign bonds, particularly Treasuries, rallied and acted as a safe haven as the AI trade suffered another bout of volatility.
Everyone's dumping Gold after hot US inflation. Here's why $4,100 could be a floor, not a cliff
Gold (XAU/USD) is recovering from a sharp sell-off triggered by hotter-than-expected United States (US) inflation data released on Wednesday. The precious metal briefly plunged toward $4,073 as investors increased their bets on further Federal Reserve (Fed) interest rate hikes before recovering as US Treasury yields and the US Dollar (USD) reversed their initial gains.