• US dollar's recovery attempt fails at 1.2645. 
  • The Canadian dollar appreciates amid higher oil prices and retreating US yields.
  • USD/CAD expected to move lower in the coming weeks – Rabobank.

US dollar’s recovery from two-week lows at 1.2595 has been short-lived on Friday, as the pair was capped at 1.2645, before pulling back to the 1.2615 area.

Four-day sell-off for the US dollar

The USD is trading lower for the fourth day in a row against its Canadian counterpart, on track to its weakest weekly performance so far this year.

The lack of progress in the peace talks between Russia and Ukraine has triggered a pick-up on crude oil prices. Beyond that, the International Energy Agency (IEA) has warned earlier this week that the decline in global demand caused by higher prices will not offset the shut-in of Russian supplies, which has increased support to the commodity-linked CAD.

Beyond that, the lower US Treasury bonds yields, which have been retreating from multi-year highs after Wednesday’s Fed rate hike, have increased bearish pressure on the USD, which has lost ground against its main rivals this week.

USD/CAD to move lower for the coming weeks–  Scotiabank

FX analysts at Scotia Bank see the pair retreating below 1.2600 and point out to a key support area at 1.2575: “Seasonal trends reflect a typically soft Q1 performance for the CAD which turns more positive as we move into Q2/Q3. We expect limited scope for USD gains in the short run and look for more CAD improvement in the coming weeks (…) “We spot resistance at 1.2650 intraday and look for firm resistance to cap USD gains today. Key USD support remains 1.2575/85.”

Technical levels to watch

USD/CAD

Overview
Today last price 1.2604
Today Daily Change -0.0023
Today Daily Change % -0.18
Today daily open 1.2627
 
Trends
Daily SMA20 1.2745
Daily SMA50 1.2687
Daily SMA100 1.2685
Daily SMA200 1.2605
 
Levels
Previous Daily High 1.2699
Previous Daily Low 1.2613
Previous Weekly High 1.2901
Previous Weekly Low 1.2686
Previous Monthly High 1.2878
Previous Monthly Low 1.2636
Daily Fibonacci 38.2% 1.2646
Daily Fibonacci 61.8% 1.2666
Daily Pivot Point S1 1.2594
Daily Pivot Point S2 1.256
Daily Pivot Point S3 1.2508
Daily Pivot Point R1 1.268
Daily Pivot Point R2 1.2732
Daily Pivot Point R3 1.2766

 

 

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