USD/CAD flirts with session lows, below 1.2600 mark

USD/CAD witnessed some selling on Friday amid a modest USD pullback from multi-month tops.
An uptick in crude oil prices underpinned the loonie and contributed to the intraday selling bias.
A combination of factors might continue to lend support to the USD and limit losses for the pair.

Haresh Menghani FXStreet

The USD/CAD pair edged lower through the Asian session and was last seen hovering near the lower end of its intraday trading range, just below the 1.2600 mark.

A combination of factors failed to assist the pair to build on the previous day's positive move to over two-week tops, instead exerted some downward pressure on the last trading day of the week. A modest pickup in crude oil prices underpinned the commodity-linked loonie. This, along with some US dollar profit-taking, further contributed to the USD/CAD pair's downtick.

Oil prices bounced back on Friday amid concerns that the blockage of the Suez Canal – one of the world's busiest shipping channels for crude and refined fuels – could squeeze supply. Investors, however, remain worried that the third wave of COVID-19 infections and fresh lockdowns in Europe may slow the anticipated recovery in fuel demand. This, in turn, might cap gains.

On the other hand, the impressive pace of coronavirus vaccinations, the optimistic outlook for the US economic recovery and a fresh leg up in the US Treasury bond yields might help limit any meaningful USD decline. Thursday's better than expected US Jobless Claims, which fell to a one-year low of 684K, reinforced the narrative of a relatively faster recovery from the pandemic.

Adding to the optimism, US President Joe Biden – in his first formal news conference on Thursday – said that he would double the vaccination rollout plan. Having reached the previous goal of 100 million shots well ahead of schedule (42 days), Biden made an ambitious pledge of administering 200 million vaccine shots in 100 days. This could further extend some support to the buck.

Market participants now look forward to the US economic docket, featuring the releases of Personal Income/Spending figures for February, Core PCE Price Index and revised Michigan Consumer Sentiment index. The data might influence the USD, which along with oil price dynamics would produce some meaningful trading opportunities around the USD/CAD pair.

Technical levels to watch

USD/CAD

Overview
Today last price	1.2592
Today Daily Change	-0.0021
Today Daily Change %	-0.17
Today daily open	1.2613

Trends
Daily SMA20	1.2576
Daily SMA50	1.2656
Daily SMA100	1.2764
Daily SMA200	1.3039

Levels
Previous Daily High	1.2629
Previous Daily Low	1.2547
Previous Weekly High	1.2548
Previous Weekly Low	1.2365
Previous Monthly High	1.287
Previous Monthly Low	1.2468
Daily Fibonacci 38.2%	1.2598
Daily Fibonacci 61.8%	1.2578
Daily Pivot Point S1	1.2563
Daily Pivot Point S2	1.2514
Daily Pivot Point S3	1.2481
Daily Pivot Point R1	1.2646
Daily Pivot Point R2	1.2679
Daily Pivot Point R3	1.2728

Author

Haresh Menghani

FXStreet

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

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