• USD/CAD retreats around 130 pips from its highest level since July 2020 touched this Thursday.
  • A sharp USD turnaround from a two-decade high turns out to be a key factor exerting pressure.
  • An intraday uptick in oil prices underpins the loonie and contributes to the sharp intraday decline.

The USD/CAD pair retreats sharply from its highest level since July 2020 touched earlier this Thursday and remains on the defensive through the early North American session. The pair is currently placed near the lower end of its daily trading range, just above the 1.3400 mark, though any meaningful corrective fall still seems elusive.

The US dollar witnessed a dramatic turnaround from a fresh 20-year peak touched earlier this Thursday. Apart from this, a goodish pickup in crude oil prices underpins the commodity-linked loonie and further contributes to the USD/CAD pair's steep intraday fall of nearly 130 pips. News that the Japanese government intervened in the forex market triggers a massive rally in the Japanese yen and prompts an aggressive USD long-unwinding trade.

That said, a more hawkish stance adopted by the Federal Reserve, along with growing recession fears, should act as a tailwind for the safe-haven greenback. Furthermore, worries that a deeper global economic downturn will dent fuel demand could keep a lid on any meaningful upside for the black liquid. This, in turn, supports prospects for the emergence of some buying around the USD/CAD pair, warranting caution before confirming a near-term top.

Even from a technical perspective, the overnight post-FOMC positive move confirmed a fresh bullish breakout through a multi-month-old ascending trend-channel resistance. Hence, any subsequent pullback might still be seen as a buying opportunity and is more likely to remain limited, at least for the time being.

Technical levels to watch

USD/CAD

Overview
Today last price 1.3434
Today Daily Change -0.0026
Today Daily Change % -0.19
Today daily open 1.346
 
Trends
Daily SMA20 1.3145
Daily SMA50 1.2995
Daily SMA100 1.2926
Daily SMA200 1.2804
 
Levels
Previous Daily High 1.3468
Previous Daily Low 1.3358
Previous Weekly High 1.3308
Previous Weekly Low 1.2954
Previous Monthly High 1.3141
Previous Monthly Low 1.2728
Daily Fibonacci 38.2% 1.3426
Daily Fibonacci 61.8% 1.34
Daily Pivot Point S1 1.3389
Daily Pivot Point S2 1.3318
Daily Pivot Point S3 1.3279
Daily Pivot Point R1 1.35
Daily Pivot Point R2 1.3539
Daily Pivot Point R3 1.361

 

 

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 Join Telegram

Recommended content


Recommended content

Editors’ Picks

EUR/USD drops below 0.9750 after upbeat US PMI data

EUR/USD drops below 0.9750 after upbeat US PMI data

Following a brief consolidation period, EUR/USD came under bearish pressure and dropped below 0.9750 during the American session on Friday. Better than expected Manufacturing and Services PMI figures from the US provided a boost to the dollar, further weighing on the pair.

EUR/USD News

GBP/USD renews multi-decade below 1.0900

GBP/USD renews multi-decade below 1.0900

After having recovered toward 1.1100 earlier in the day, GBP/USD turned south in the American session and touched its lowest level since 1985 below 1.0900. The PMI data from the US showed that the private sector activity recovered in September, fueling another leg higher in DXY.

GBP/USD News

Gold falls below $1,650, looks to post weekly losses

Gold falls below $1,650, looks to post weekly losses

Pressured by the renewed dollar strength on upbeat US PMI figures, gold lost its recovery momentum and dropped below $1,650. Meanwhile, the 10-year US T-bond yield is up nearly 1%, forcing XAU/USD to stay on the backfoot heading into the weekend.

Gold News

BTC makes a bullish comeback amid regulatory tension, but lacks confirmation

BTC makes a bullish comeback amid regulatory tension, but lacks confirmation

Bitcoin price has produced three consecutive lower lows since September 7, but at the same time, the Relative Strength Indicator (RSI) has shown a positive rise demonstrating a lack of underlying bearish power.

Read more

TSLA suffers as yields continue to dominate

TSLA suffers as yields continue to dominate

Tesla (TSLA) reacted poorly to the latest central bank developments with the stock falling 4% on Thursday. Main indices were not as badly hit with the S&P 500 losing less than 1% and the Nasdaq just over 1%.

Read more

Forex MAJORS

Cryptocurrencies

Signatures