USD/CAD flirting with 200-DMA support, focus shifts to monthly Canadian GDP

Haresh Menghani FXStreet

• The USD continues to be weighed down by dovish Fed/sliding US bond yields.
• The ongoing positive move in oil prices underpin Loonie and add to the selling bias.
• Traders now look forward to the Canadian GDP/second-tier US data for fresh impetus.

The USD/CAD pair is currently placed at near three-month lows, around the 1.3120 region, with bears eyeing a sustained breakthrough the very important 200-day SMA.

The pair extended the overnight sharp retracement slide and remained under some selling pressure for the second consecutive session amid a broad-based US Dollar weakness. A dovish Fed overnight, reinforced by the ongoing slide in the US Treasury bond yields, kept the USD bulls on the defensive and turned out to be one of the key factors exerting some downward pressure.

Adding to this, crude oil prices built on its positive move for the third straight session and gained additional support from Wednesday's EIA weekly report that showed oil stockpiles rose less than expected. Positive oil prices underpinned demand for the commodity-linked currency - Loonie and further collaborated to the pair's ongoing downfall to the lowest level since Nov. 8.

It would now be interesting to see if bears maintain their dominant position or the pair is able to defend the 200-day SMA as the focus now shifts to the monthly Canadian GDP growth figures, due for release later during the early North-American session. From the US, second-tier releases of the usual initial weekly jobless claims and Chicago PMI might also be looked upon for some short-term impetus.

Technical levels to watch

A convincing breakthrough the mentioned support, leading to a subsequent fall below the 1.3100 handle, now seems to accelerate the fall further towards the next support near mid-1.3000s. On the flip side, the 1.3150-55 region now seems to act as an immediate resistance, above which a bout of short-covering might assist the pair to aim towards reclaiming the 1.3200 handle.

Author

Haresh Menghani

FXStreet

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

EUR/USD struggles to regain momentum in the low1.1600s

EUR/USD is giving some signs of life in the aftermath of two severe days of losses on Wednesday, reclaiming the 1.1600 hurdle and above on the back of the resurgence of a mild selling bias around the US Dollar. Moving forward, the usual US weekly Claims will take centre stage on Thursday ahead of Friday’s crucial NFP data.

GBP/USD appears bid around 1.3370

GBP/USD reverses part of its recent multi-day decline, gathering some balance and managing to reach the 1.3400 region, where some initial resistance seems to have turned up. Cable’s uptick comes in response to some loss of momentum in the Greenback despite the geopolitical scenario remaining fragile.

Gold recovers modestly despite intensifying Middle East crisis

Gold keeps its daily gains well in place, although a break above the $5,200 mark per troy ounce still remains elusive on Wednesday. The yellow metal’s rebound comes in response to the persistent flight-to-safety amid intense geopolitical tensions in the Middle East and the bearish performance of the US Dollar.

XRP rises alongside peers as ETFs attract inflows

Ripple (XRP) is gaining upside momentum, trading above $1.40 at the time of writing on Wednesday. The remittance token is rising in tandem with major crypto assets, including Bitcoin (BTC), which has crossed above the pivotal $70,000 level, and Ethereum (ETH), which is holding above $2,000.

First Venezuela, now Iran: The US-China energy war escalates

At first glance, the latest escalation involving the United States with both Iran and Venezuela looks like another chapter in a long-running geopolitical story. But viewed through a broader strategic lens, something else may be unfolding: Energy.

Bittensor extends recovery despite retail demand slump

Bittensor, a leading Artificial Intelligence token, is aging up above $190 at the time of writing on Wednesday. Steady price increases characterise the broader crypto market, with Bitcoin holding above $71,000 and Ethereum above $2,000.