USD/CAD defends 1.2300 around three-month low even as oil renews seven-year high


  • USD/CAD awaits fresh clues to extend two-day downtrend.
  • Firmer inflation at home joins strong WTI crude oil prices to favor bears.
  • Risk-on mood, broad USD weakness adds strength to the bearish bias.
  • US data, risk catalysts will be in focus amid a light calendar in Canada.

USD/CAD licks its wounds around three-month low, sidelined near 1.2320 during Thursday’s Asian session.

The Loonie pair refreshed the multi-day bottom during a two-day fall the previous day after the Canadian inflation data came out better-than-expected.  Further, firmer prices of Canada’s main export item WTI crude oil and US dollar weakness added to the downside pressure.

In addition to Canada’s headlines Consumer Price Index (CPI) for September, the Bank of Canada’s (BOC) CPI Core figures also rose past YoY forecasts and prior readings. The same hints at the BOC’s further tightening of monetary policy and favor for the USD/CAD bulls.

Elsewhere, oil prices cheered lower-than-anticipated weekly inventory data from the Energy Information Administration (EIA), as well as US dollar weakness and risk-on mood. That said, WTI crude oil jumped to the fresh high since October 2014 of $83.55, around $83.40 by the press time.

That said, the US Dollar Index (DXY) prints a six-day south-run near the lowest levels in three weeks, flashing 93.60 level by the end of Wednesday’s North American session. The greenback gauge failed to benefit from the tapering signals from Federal Reserve Governor Randal Quarles as equities rallied on firmer earnings and the Treasury yields also softened after refreshing the multi-day top.

While portraying the mood, Wall Street benchmarks gained upside momentum amid strong Q3 reports from the industry leaders like Tesla and chatters over US stimulus passage. The same exerted pressure on the 10-year Treasury yields around 1.66%, up 2.6 basis points (bps), following the bond yields’ run-up to the five-month high.

Given the lack of major data/events, USD/CAD traders need to pay close attention to the risk catalysts and the second-tier US economics for fresh impulse.

Technical analysis

A clear downside break of 61.8% Fibonacci retracement of June-August upside, near 1.2365, directs USD/CAD towards late June’s low surrounding 1.2250 should the quote manage to conquer the 1.2300 immediate support.

Additional important levels

Overview
Today last price 1.232
Today Daily Change -0.0036
Today Daily Change % -0.29%
Today daily open 1.2356
 
Trends
Daily SMA20 1.2556
Daily SMA50 1.2611
Daily SMA100 1.2506
Daily SMA200 1.2503
 
Levels
Previous Daily High 1.2383
Previous Daily Low 1.2312
Previous Weekly High 1.2498
Previous Weekly Low 1.2337
Previous Monthly High 1.2896
Previous Monthly Low 1.2494
Daily Fibonacci 38.2% 1.2339
Daily Fibonacci 61.8% 1.2356
Daily Pivot Point S1 1.2317
Daily Pivot Point S2 1.2279
Daily Pivot Point S3 1.2246
Daily Pivot Point R1 1.2389
Daily Pivot Point R2 1.2422
Daily Pivot Point R3 1.2461

 

 

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