- The overnight dovish shift by the BoC provided a strong lift on Wednesday.
- The post-FOMC USD selloff prompted some fresh selling at higher levels.
- Subdued oil prices undermined the Loonie and helped limit the downside.
The USD/CAD pair lacked any firm directional bias and seesawed between tepid gains/minor losses through the early European session on Thursday.
A combination of diverging forces failed to provide any meaningful impetus and led to a subdued/range-bound price action on Thursday, forcing the pair to digest the overnight volatile swing.
Weaker oil prices partly offset USD fall
The pair added to the previous session's modest recovery move from over three-month lows and gained strong follow-through traction on Wednesday in reaction to a dovish shift by the Bank of Canada.
The intraday upsurge of over 125 pips got an additional boost after the Fed sent a clear signal of a possible extended pause to the recent policy easing cycle, through the momentum faltered near 100-day SMA.
The pair retreated around 50 pips from levels just above the 1.3200 handle after the Fed Chair Jerome Powell said that we will need to see a significant move up in inflation before considering raising interest rates.
The not so hawkish remarks triggered a fresh leg of a freefall in the US Treasury bond yields, which kept the USD bulls on the defensive and did little to assist the pair to build on the positive momentum.
However, a weaker tone surrounding Crude Oil prices undermined demand for the commodity-linked currency – Loonie and turned out to be one of the key factors lending some support to the major.
It will now be interesting to see if bulls are able to regain control or the overnight rejection from a key hurdle marks the resumption of the prior/well-established bearish trend ahead of Friday's US monthly jobs report.
Technical levels to watch
|Today last price||1.3162|
|Today Daily Change||0.0003|
|Today Daily Change %||0.02|
|Today daily open||1.3159|
|Previous Daily High||1.3209|
|Previous Daily Low||1.3074|
|Previous Weekly High||1.3139|
|Previous Weekly Low||1.3052|
|Previous Monthly High||1.3384|
|Previous Monthly Low||1.3134|
|Daily Fibonacci 38.2%||1.3157|
|Daily Fibonacci 61.8%||1.3125|
|Daily Pivot Point S1||1.3085|
|Daily Pivot Point S2||1.3012|
|Daily Pivot Point S3||1.295|
|Daily Pivot Point R1||1.3221|
|Daily Pivot Point R2||1.3282|
|Daily Pivot Point R3||1.3356|
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.