• USD/CAD was seen oscillating in a range through the first half of the trading action on Monday.
  • Bullish crude oil prices underpinned the loonie and capped any meaningful gains for the major.
  • Elevated US bond yields acted as a tailwind for the USD and extended some support to the pair.

The USD/CAD pair bounced nearly 30 pips from the early European session lows and was last seen trading just a few pips below daily tops, around the 1.2370 region.

The pair, so far, has struggled to capitalize on last week's modest recovery move from four-month lows and continued with its subdued/range-bound price action for the second straight session on Monday. The recent bullish run in crude oil prices to multi-year tops underpinned the commodity-linked loonie. This, in turn, acted as a headwind for the USD/CAD pair amid the lack of any meaningful buying around the US dollar.

The dominant risk-on mood was seen as a key factor that weighed on the safe-haven greenback. That said, elevated US Treasury bond yields – amid prospects for an early policy tightening by the Fed – helped limit losses for USD and extended some support to the USD/CAD pair. The Fed Chair Jerome Powell reaffirmed on Friday that the US central bank remains on track to begin rolling back its massive pandemic-era stimulus.

Moreover, bets for an interest rate hike in 2022 have been rising amid expectations that the recent rally in commodity prices would stoke inflation. The markets, however, seem to have fully priced in hawkish Fed expectations, which might hold the USD bulls from placing aggressive bets. This makes it prudent to wait for a strong follow-through buying before confirming that the USD/CAD pair has bottomed out in the near term.

There isn't any major market-moving economic data due for release on Monday, either from the US or Canada. Hence, the US bond yields and the broader market risk sentiment will play a key role in driving the USD demand and provide some impetus to the USD/CAD pair. Apart from this, traders will further take cues from oil price dynamics to grab some short-term opportunities around the major.

Technical levels to watch

USD/CAD

Overview
Today last price 1.2367
Today Daily Change 0.0003
Today Daily Change % 0.02
Today daily open 1.2364
 
Trends
Daily SMA20 1.2505
Daily SMA50 1.2601
Daily SMA100 1.2515
Daily SMA200 1.2498
 
Levels
Previous Daily High 1.239
Previous Daily Low 1.2321
Previous Weekly High 1.241
Previous Weekly Low 1.2288
Previous Monthly High 1.2896
Previous Monthly Low 1.2494
Daily Fibonacci 38.2% 1.2347
Daily Fibonacci 61.8% 1.2364
Daily Pivot Point S1 1.2326
Daily Pivot Point S2 1.2289
Daily Pivot Point S3 1.2257
Daily Pivot Point R1 1.2395
Daily Pivot Point R2 1.2427
Daily Pivot Point R3 1.2464

 

 

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