USD/CAD holds steady near one-week high, bulls look to seize control near 1.3600 mark

USD/CAD struggles for a firm intraday direction and remains confined in a range on Tuesday.
A modest uptick in crude oil prices underpins the Loonie and acts as a headwind for the pair.
The downside remains cushioned amid the emergence of some buying around the US Dollar.

Haresh Menghani FXStreet

The USD/CAD pair oscillates in a narrow band on Tuesday and consolidates the overnight strong rally of around 220 pips from sub-1.3400 levels. The pair holds steady near a one-week high through the early European session, with bulls now awaiting a sustained strength beyond the 1.3600 round-figure mark.

Crude oil prices edge high and recover a part of the previous day's slump of nearly 6.5% amid hopes for a recovery in fuel demand amid the easing of COVID-19 curbs in China. This, in turn, underpins the commodity-linked Loonie and acts as a headwind for the USD/CAD pair. The downside, however, remains cushioned amid the emergence of some US Dollar buying, bolstered by bets that the Federal Reserve may raise interest rates more than projected.

The Institute for Supply Management (ISM) reported that the US Service PMI unexpectedly increased to 56.5 in November from 54.4 in the previous month. This comes on the back of the upbeat US monthly jobs report released on Friday and suggests that the economy remained resilient despite rising borrowing costs. The incoming strong US macro data validates Fed Chair Jerome Powell's forecast that the peak interest rate will be higher than expected.

The mixed fundamental backdrop, meanwhile, warrants some caution before placing aggressive directional bets around the USD/CAD pair. Traders might also prefer to move to the sidelines and await the latest monetary policy update by the Bank of Canada (BoC) on Wednesday. In the meantime, traders on Tuesday might take cues from the release of Trade Balance data from the US and Canada. Apart from this, the USD and oil price dynamics should provide some impetus.

Technical levels to watch

USD/CAD

Overview
Today last price	1.3591
Today Daily Change	-0.0009
Today Daily Change %	-0.07
Today daily open	1.36

Trends
Daily SMA20	1.3406
Daily SMA50	1.3571
Daily SMA100	1.33
Daily SMA200	1.3034

Levels
Previous Daily High	1.3605
Previous Daily Low	1.3385
Previous Weekly High	1.3646
Previous Weekly Low	1.3381
Previous Monthly High	1.3808
Previous Monthly Low	1.3226
Daily Fibonacci 38.2%	1.3521
Daily Fibonacci 61.8%	1.3469
Daily Pivot Point S1	1.3455
Daily Pivot Point S2	1.331
Daily Pivot Point S3	1.3235
Daily Pivot Point R1	1.3675
Daily Pivot Point R2	1.375
Daily Pivot Point R3	1.3895

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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