USD/CAD consolidates in a range near four-week tops, above mid-1.2100s

USD/CAD was seen oscillating in a range just below four-week tops touched on Friday.
The ongoing bullish run in crude oil prices underpinned the loonie and capped gains.
A modest USD strength extended some support and helped limit any meaningful slide.

Haresh Menghani FXStreet

The USD/CAD pair extended its sideways consolidative price move through the first half of the European session and remained confined in a range, just above mid-1.2100s.

A combination of diverging forces failed to assist the USD/CAD pair to capitalize on Friday's positive move to four-week tops, instead led to a subdued action on the first day of a new trading week. The ongoing bullish run in crude oil prices underpinned the commodity-linked loonie and kept a lid on any further gains for the major.

Oil prices added to the recent strong gains recorded over the past three weeks and shot to the highest level since October 2018. The momentum remained well supported by an improved outlook for the recovery in the fuel demand amid the continuous improvement of the coronavirus situation in the United States and much of Europe.

The negative factor, to a larger extent, was offset by a modest US dollar strength, which, in turn, helped limit the downside for the USD/CAD pair. Expectations that the Fed might begin the discussion on tapering its asset purchases in the face of rising inflationary pressures. This, in turn, acted as a tailwind for the greenback.

It is worth recalling that the pace of inflation in the US climbed to a 13-year high in May. Apart from this, signs of stability in the US Treasury bond yields extended some additional support to the buck, though did little to impress bullish traders or provide any meaningful impetus to the USD/CAD pair, at least for now.

Investors now seemed reluctant to place any aggressive bets, rather preferred to wait on the sidelines ahead of the key FOMC monetary policy meeting on June 15-16. This makes it prudent to wait for some strong follow-through buying before confirming that the USD/CAD has bottomed out and positioning for any further gains.

Technical levels to watch

USD/CAD

Overview
Today last price	1.2164
Today Daily Change	0.0009
Today Daily Change %	0.07
Today daily open	1.2155

Trends
Daily SMA20	1.2085
Daily SMA50	1.2264
Daily SMA100	1.2453
Daily SMA200	1.2735

Levels
Previous Daily High	1.2178
Previous Daily Low	1.208
Previous Weekly High	1.2178
Previous Weekly Low	1.2057
Previous Monthly High	1.2352
Previous Monthly Low	1.2013
Daily Fibonacci 38.2%	1.214
Daily Fibonacci 61.8%	1.2117
Daily Pivot Point S1	1.2098
Daily Pivot Point S2	1.2041
Daily Pivot Point S3	1.2001
Daily Pivot Point R1	1.2195
Daily Pivot Point R2	1.2235
Daily Pivot Point R3	1.2292

Author

Haresh Menghani

FXStreet

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

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