USD/CAD holds steady above 1.3700 mark amid retreating oil prices, stronger USD

USD/CAD struggles to gain any meaningful traction, though the downside remains cushioned.
Retreating oil prices undermines the loonie offering some support amid sustained USD buying.
Holiday-thinned liquidity might hold back bulls from placing aggressive bets around the major.

Haresh Menghani FXStreet

The USD/CAD pair fails to capitalize on its modest intraday uptick and retreats a few pips from a one-week high touched earlier this Monday. Spot prices, however, manage to hold comfortably above the 1.3700 mark and remain well supported by a combination of factors.

Crude oil prices edge lower and snap a five-day winning streak to the highest level since late August amid worries that a deeper global economic downturn will hurt fuel demand. This, in turn, undermines the commodity-linked loonie and acts as a tailwind for the USD/CAD pair amid sustained US dollar buying interest.

In fact, the USD Index, which measures the greenback's performance against a basket of currencies - hits a one-and-half-week high amid expectations for a more aggressive policy tightening by the Fed. The markets have been pricing in a greater chance of a supersized 75 bps Fed rate hike for the fourth consecutive meeting in November.

The bets were reaffirmed by the recent hawkish remarks by several Fed officials and Friday's upbeat US monthly jobs report, which pointed to the resilient economy. Apart from this, the prevalent risk-off environment also offers support to the safe-haven buck and supports prospects for additional gains for the USD/CAD pair.

That said, relatively thin trading volumes on the back of a bank holiday in the US and Canada might hold back traders from placing aggressive bets. Investors might also prefer to move to the sidelines ahead of the release of the FOMC minutes, the US consumer inflation figures and the US Retail Sales figures this week.

Nevertheless, the USD/CAD pair seems poised to aim back to reclaim the 1.3800 round-figure mark and retest the YTD peak, around the 1.3835-1.3834 region touched last week. Hence, any meaningful 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	1.3739
Today Daily Change	-0.0002
Today Daily Change %	-0.01
Today daily open	1.3741

Trends
Daily SMA20	1.349
Daily SMA50	1.3177
Daily SMA100	1.3016
Daily SMA200	1.2855

Levels
Previous Daily High	1.3761
Previous Daily Low	1.3676
Previous Weekly High	1.3827
Previous Weekly Low	1.3503
Previous Monthly High	1.3838
Previous Monthly Low	1.2954
Daily Fibonacci 38.2%	1.3708
Daily Fibonacci 61.8%	1.3728
Daily Pivot Point S1	1.3691
Daily Pivot Point S2	1.3641
Daily Pivot Point S3	1.3606
Daily Pivot Point R1	1.3776
Daily Pivot Point R2	1.3811
Daily Pivot Point R3	1.3861

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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