- A combination of factors failed to assist USD/CAD to gain any meaningful traction.
- Rising crude oil prices underpinned the loonie and acted as a tailwind for the major.
- A modest USD pullback further collaborated to cap gains ahead of the US CPI report.
The USD/CAD pair struggled to capitalize on its modest intraday gains and was last seen trading in the neutral territory, around mid-1.2600s during the early European session.
The pair managed to regain some positive traction on Tuesday and recovered a part of the previous day's intraday slide from the vicinity of the 1.2700 mark. However, a combination of factors held bulls from placing aggressive bets and kept a lid on any meaningful gains for the USD/CAD pair.
WTI crude edged higher for the third successive day and climbed the highest level since August 3, closer to the $71.00 mark amid concerns that another storm could affect output in the US Gulf Coast. This could underpin the commodity-linked loonie and act as a headwind for the USD/CAD pair.
On the other hand, the US dollar moved further away from the two-week tops touched on Monday, which might further keep a lid on any meaningful upside for the major. The USD bulls moved on the sidelines and preferred to wait for a fresh catalyst from Tuesday's release of the US consumer inflation figures.
The US CPI report will be looked upon for fresh clues about the likely timing of the Fed's tapering plan. This, in turn, will play a key role in influencing the USD ahead of the FOMC monetary policy meeting on September 20-21 and provide a fresh directional impetus to the USD/CAD pair.
The US Producer Price Index (PPI) for August recorded the largest gain since November 2010 and indicated that higher inflation could persist for some time. A stronger US headline CPI print will reaffirm expectations about an imminent Fed taper announcement and boost to the greenback.
Nevertheless, the fundamental backdrop makes it prudent to wait for some follow-through buying before positioning for any further gains. Even from a technical perspective, the USD/CAD pair's inability to reclaim the 1.2700 round-figure mark warrants some caution for aggressive bullish traders.
Technical levels to watch
|Today last price||1.2654|
|Today Daily Change||0.0005|
|Today Daily Change %||0.04|
|Today daily open||1.2649|
|Previous Daily High||1.2695|
|Previous Daily Low||1.2638|
|Previous Weekly High||1.2762|
|Previous Weekly Low||1.2518|
|Previous Monthly High||1.2949|
|Previous Monthly Low||1.2453|
|Daily Fibonacci 38.2%||1.266|
|Daily Fibonacci 61.8%||1.2674|
|Daily Pivot Point S1||1.2626|
|Daily Pivot Point S2||1.2603|
|Daily Pivot Point S3||1.2569|
|Daily Pivot Point R1||1.2683|
|Daily Pivot Point R2||1.2718|
|Daily Pivot Point R3||1.2741|
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.