USD/CAD hovering in the 1.2800 region as oil retreats from new multi-year high at $72.30

  • The US dollar along with the US yields kept pushing higher in line with the trend of the recent weeks as market participants are expecting the Federal Reserve to follow through on policy normalization.
  • The USD/CAD is stabilizing around the 1.2800 handle as crude oil is retreating from a new multi-year high at $72.30 a barrel.

The USD/CAD pair is trading at around 1.2800 up 0.15% on Thursday as the US dollar is well-supported and bond yields keep rising.

In Asia and Europe the Loonie found an intraday floor at 1.2752 then the pair rose and stabilized in the 1.2800 handle region in the first part of the American session.

The US Dollar Index (DXY) which measures the greenback relative to a basket of currencies is continuing the trend of the last weeks trading up about 0.15% on Thursday. The 10-year Treasury yield benchmark is also continuing its uptrend and reaching levels not seen since summer 2011.  

In fact, investors are turning away from bonds as they are considered riskier assets than holding the US dollar. Since the Federal Reserve Bank is expected to raise interest rates three to four times in 2018 market participants are buying the greenback as they think it will likely go higher in the future as well as for its yielding quality.

The CAD is tightly correlated to oil prices which are on the larger time-frame in a strong bull trend. Oil reached a new multi-year high today as it hit $72.30 a barrel. 

USD/CAD 4-hour chart 

The trend is neutral to slightly bullish and support is seen at 1.2747 swing low followed by the 1.2727 swing low established on May 11. To the upside, the bulls should expect immediate support/resistance at the 1.2800 handle then at the 1.2850 supply level followed by 1.2926 swing high. The Loonie is trading above its 200-period simple moving average (SMA) but below its 50 and 100-period SMA suggesting a mild upward bias.

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 securities. 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 Forex 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.