USD/CAD drops back towards 1.2400 with eyes on BOC


  • USD/CAD refreshes intraday low after Monday’s recovery lacks follow-through.
  • New appointment in BOC, bullish WTI keep bears hopeful after strong Canadian jobs.
  • US CPI, risk catalysts eyed for intermediate moves.

USD/CAD fails to extend the week-start rebound, down 0.07% around 1.2445, amid early Tuesday. In doing so, the Loonie pair justifies the market’s optimism from Wednesday’s Bank of Canada (BOC) monetary policy meeting amid upbeat fundamentals.

Among many positives that pushed BOC to lead the Western central banks towards tapering, price pressures and WTI strength could be cited as the key. Recent analysis from Reuters said, “Plunging Canadian immigration during the pandemic threatens to feed more persistent inflation pressures than the Bank of Canada is expecting, with data already showing signs of rising worker shortages that could push wages higher as the economy reopens.”

On the other hand, economic recovery gains momentum despite the covid Delta variant and backs the energy demand. The same joins OPEC+ indecision to keep oil prices near the highest since October 2018, up 0.12% intraday around $73.70 by the press time.

Additionally, a strong Canadian jobs report for June and the appointment of Carolyn Rogers as New Senior Deputy Governor of the BOC hints at further tapering on Wednesday.

It’s worth noting that the officials from the White House are also discussing the cross-border restrictions with Canada and other Western countries while staying cautious over the coronavirus (COVID-19) and its strains.

Amid these plays, market sentiment stays sluggish with the S&P 500 Futures taking rounds to record top, mildly offered of late, whereas the US 10-year Treasury yield rises for the third consecutive day to 1.373% by the press time.

Given the lack of major data ahead of the US session, covid headlines may entertain USD/CAD traders. However, US CPI will be key to watch on Tuesday as an uptick in inflation figures will renew reflation fears and put a safe-haven bid under the Loonie prices. It’s worth noting that nothing becomes more important than the BOC’s anticipated policy tightening.

Read: USD/CAD Weekly Forecast: Is the Canadian dollar a one-trick pony?

Technical analysis

Although failures to cross the 1.2600 hurdle weigh on USD/CAD prices, the 1.2400 threshold, comprising 100-day EMA and an ascending support line from June 09, becomes a tough nut to crack for the bulls.

Additional important levels

Overview
Today last price 1.2444
Today Daily Change -0.0009
Today Daily Change % -0.07%
Today daily open 1.2453
 
Trends
Daily SMA20 1.2374
Daily SMA50 1.2216
Daily SMA100 1.2375
Daily SMA200 1.264
 
Levels
Previous Daily High 1.2514
Previous Daily Low 1.2444
Previous Weekly High 1.259
Previous Weekly Low 1.2303
Previous Monthly High 1.2487
Previous Monthly Low 1.2007
Daily Fibonacci 38.2% 1.2487
Daily Fibonacci 61.8% 1.2471
Daily Pivot Point S1 1.2427
Daily Pivot Point S2 1.24
Daily Pivot Point S3 1.2356
Daily Pivot Point R1 1.2497
Daily Pivot Point R2 1.2541
Daily Pivot Point R3 1.2568

 

 

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.

Feed news

Latest Forex News


Latest Forex News

Editors’ Picks

EUR/USD retreats below 1.1300 area as NFP-inspired dollar weakness fades

EUR/USD jumped to a daily high of 1.1333 with the initial market reaction to the disappointing November Nonfarm Payrolls data but quickly returned below 1.1300. Rising US Treasury bond yields seem to be helping the dollar stay resilient against its major rivals. 

EUR/USD News

GBP/USDdrops to 1.3250 area as dollar regains strength

GBP/USD spiked above 1.3300 in the early American session with the initial market reaction to the gloomy US November jobs report. However, the greenback regathered strength on hawkish Fed commentary and forced the pair to turn south.

GBP/USD News

Gold struggles to capitalize on weak NFP data, holds near $1,770

Gold spiked to a daily high near $1,780 with the initial market reaction to the disappointing Nonfarm Payrolls data from the US but seems to be having a difficult time preserving its bullish momentum with the 10-year US T-bond yield staying resilient.

Gold News

The bull and the bear case for BTC

Bitcoin price saw a bullish impulse that faced massive headwinds before it tagged a crucial psychological barrier. Bitcoin is likely to experience massive volatility as the situation resolves over time. 

Read more

Cyber Monday 2021 Discounts!

Glued to your trading screen on Cyber Monday? Upgrade your skills by signing up for FXStreet’s Premium service, offered at a discount of up to 50%. Fellow traders have already taken advantage of Black Friday profits. What about you? 

Subscribe now!

Forex MAJORS

Cryptocurrencies

Signatures