|

USD/CAD edges down to 1.3650 as US Dollar drops, Oil price rebounds

  • USD/CAD drops to 1.3650 on multiple headwinds.
  • Firm speculation for Fed rate cuts in September has uplifted the market mood.
  • A sharp recovery in the Oil price improves the Canadian Dollar’s appeal.

The USD/CAD pair falls after failing to recapture the crucial resistance of 1.3700 in Monday’s early New York session. The Loonie asset slips to 1.3650 due to multiple headwinds: a decline in the US Dollar and a sharp recovery in the Oil price.

Market sentiment is quite bullish, as investors’ confidence in the Federal Reserve (Fed) reducing interest rates from the September meeting has improved. The S&P 500 opens on a bullish note, exhibiting a higher risk appetite. The scenario of the Fed pivoting to interest rate cuts is unfavorable for bond yields. 10-year US Treasury yields have come down below the crucial support of 4.50%.

The US Dollar Index (DXY) struggles for a firm footing above 105.00 as weak United States economic data has raised concerns over the economic outlook. The US Nonfarm Payrolls (NFP) and the Services PMI data for April showed that labor demand was weak, the Unemployment Rate rose to 3.9%, wage growth slowed, and Services PMI fell to an almost 16-month low of 49.4. These conditions indicate that the economy is failing to cope with the Fed’s restrictive framework.

Meanwhile, the Canadian Dollar gains as the Oil price rebounds from $77.75. West Texas Intermediate (WTI), futures on NYMEX, ends its six-day losing spell as investors worry about geopolitical risks. Israel is expected to extend operations in Rafah, the southern part of Gaza, as prospects for a Gaza ceasefire appear slim. On Sunday, Hamas reiterated its demand for an end to the war in exchange for the freeing of hostages but Israeli Prime Minister Benjamin Netanyahu flatly ruled that out, Reuters reported.

It is worth noting that Canada is the leading exporter of Oil to the US and higher Oil prices strengthen the Canadian Dollar.

USD/CAD

Overview
Today last price1.3654
Today Daily Change-0.0032
Today Daily Change %-0.23
Today daily open1.3686
 
Trends
Daily SMA201.3707
Daily SMA501.3608
Daily SMA1001.3511
Daily SMA2001.3554
 
Levels
Previous Daily High1.3692
Previous Daily Low1.361
Previous Weekly High1.3785
Previous Weekly Low1.361
Previous Monthly High1.3846
Previous Monthly Low1.3478
Daily Fibonacci 38.2%1.3661
Daily Fibonacci 61.8%1.3641
Daily Pivot Point S11.3633
Daily Pivot Point S21.358
Daily Pivot Point S31.3551
Daily Pivot Point R11.3715
Daily Pivot Point R21.3745
Daily Pivot Point R31.3797

Author

Sagar Dua

Sagar Dua

FXStreet

Sagar Dua is associated with the financial markets from his college days. Along with pursuing post-graduation in Commerce in 2014, he started his markets training with chart analysis.

More from Sagar Dua
Share:

Editor's Picks

AUD/USD consolidates above 0.7000; remains close to monthly top

AUD/USD holds steady above 0.7000 during the Asian session on Friday, trading just below the previous day's monthly low amid diverging forces. A hawkish RBA continues to support the Aussie, while the recent decline in US bond yields keeps the US Dollar depressed near a three-week low. However, oil-driven inflation fears reinforce Fed hike bets, which, along with geopolitical risks, could benefit the safe-haven buck and cap the currency pair.

USD/JPY bounces off one-month low; climbs to 157.00 amid reviving USD demand

USD/JPY rebounds from the 156.00 neighborhood, or a one-month low touched during Friday’s Asian session, with bulls looking to extend momentum beyond 157.00 amid the emergence of some US Dollar buying. Meanwhile, Japan's National CPI rose to a nine-month peak and reaffirmed BoJ rate-hike bets, which could support the Japanese Yen and cap gains for the currency pair.

Gold treads water around $4,000

Gold prices maintain its offered stance in place at the end of the week, hovering around the key $4,000 threshold per troy ounce. The persistent selling bias in the precious metal comes amid decent gains in the US Dollar and an acceptable rebound in US Treasury yields across the curve, all alongside further upside traction in crude oil prices.

Crypto Today: Bitcoin holds the 50-day EMA as Ethereum and XRP face structural resistance

Bitcoin gradually ticks up on Friday, trading above $81,000. The Crypto King has recently defended structural support near $80,000, reinforcing the prevailing bullish outlook. Ethereum similarly edges higher above $2,400, while Ripple trades above $1.32 after testing support around $1.30.

The French bond panic is overdone. Here's what the market is misreading 

France's 10-year government bond yield has climbed above 5%, reigniting fears of a sovereign debt crisis in the Eurozone. With public debt exceeding €3.5 trillion, persistent budget deficits and a fragmented political landscape, investors are increasingly questioning the French government's ability to stabilize its finances.

What November 3 means for the Fed's rate path and the US Dollar

The USD faces a decisive period ahead of the November 3 midterm elections. While markets anticipate another interest rate increase from the Fed in December, the battle for control of Congress could reshape fiscal policy expectations and, indirectly, the path of US monetary policy in 2027.