USD/CAD holds weaker around 1.2400 mark

Haresh Menghani FXStreet

• Subdued USD action prompts fresh selling.
• Bullish oil prices add to the downward pressure.

After yesterday's brief pause, the USD/CAD pair came under some renewed selling pressure and hangs closer to last week's over 3-month lows.

The pair did attempt a modest recovery on Monday and was being supported by a strong follow-through US Dollar buying interest backed by the recent hawkish comments from various FOMC members, suggesting at least three interest rate hikes in 2018.

The recovery move, however, was capped near mid-1.2500s following the release of Bank of Canada’s (BoC) optimistic business outlook survey, which supported the case for a January rate hike move and underpinned the Canadian Dollar, despite NAFTA risks.

Meanwhile, the ongoing bullish run-up in crude oil prices remained supportive for the commodity-linked Loonie and further collaborated towards keeping a lid on any meaningful recovery for the major.

Currently hovering around the 1.2400 handle, traders might now take cues from today's second-tier economic releases in what could be another lackluster trading session on Tuesday.

Technical levels to watch

Immediate support is pegged near the 1.2375 region and is closely followed by mid-1.2300s, below which the pair is likely to accelerate the fall towards testing sub-1.2300 level.

On the upside, the 1.2445-50 region might continue to cap any recovery attempts, which if cleared now seems to trigger a short-covering bounce even beyond the 1.25 psychological mark towards 1.2530-35 horizontal hurdle.

Author

Haresh Menghani

FXStreet

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

AUD/USD consolidates above 0.7200 after hot Chinese CPI data

AUD/USD is extending its consolidative price action above 0.7200 during the Asian session on Wednesday, uninspired by hot Chinese CPI and PPI data. Meanwhile, rising RBA rate-hike bets act as a tailwind for the Aussie amid Yen-inspired US Dollar weakness. Traders await the release of US inflation figures later in the week for fresh impetus.

USD/JPY stays weak near 153.50 amid aggressive BoJ hike bets

USD/JPY attracts fresh sellers in the Asian session on Wednesday as the strong Reuters Tankan business survey adds to the case for continued BoJ policy normalisation and boosts the Japanese Yen. This, along with a broadly weaker US Dollar, keeps the pair close to a nearly seven-month low set on Tuesday.

Gold rebounds from $4,350; will it last?

Gold is rebounding from a one-week low near $4,350 in the Asian session on Wednesday. The US Dollar, however, struggles to lure buyers amid a rallying Yen, supporting the commodity as traders await the key US inflation data for a fresh impetus. However, the rebound could be short-lived amid expectations of a Fed rate hike this month.

Bitcoin takes a breather, Ethereum and XRP maintain bullish footing

Bitcoin (BTC), Ethereum (ETH) and Ripple (XRP) are trading with a broadly constructive tone on Wednesday despite BTC's mild pullback over the past two days. The Crypto King holds above $78,000; ETH and XRP remain strong above key Exponential Moving Averages (EMAs), keeping their upside prospects intact.

Gold and stocks: What eight midterm elections did

I went back through every midterm election since 1994 and asked one question of each: when did the stock market make its low for the year, before the vote or after it? In seven of the eight cycles, the low came before the election. In six of the eight, it came between mid-June and mid-October, which is to say in the exact window that the "they won't let it fall" argument says is protected.

Diesel’s record $100 warning: The oil shock hiding in plain sight

The Oil market may look calmer than it did a few months ago, but diesel is sending a very different message. The US diesel crack spread, the premium of ultra-low sulphur diesel futures over WTI, recently surged above $100 per barrel for the first time, reaching an intraday record of just over $102.00.