- USD/CAD break below 1.2500 amid higher energy prices.
- The market sentiment is downbeat, weighs on the USD/CAD pair.
- USD/CAD: The pair has another leg-down before momentum indicators reach oversold levels from a technical perspective.
The USD/CAD pair slides during the New York session is trading at 1.2462, down 0.18% at the time of writing.
The market sentiment is downbeat, portrayed by US stock indices posting losses between 0.25% and 0.34%. Factors like the energy crunch in Europe and Asia, the Chinese Evergrande’s real-estate spillover in the sector, inflationary pressures, and rising energy prices have kept investors at bay.
That said, rising oil prices are boosting the Canadian dollar. Western Texas Intermediate (WTI) crude oil is barely unchanged at $79.90, below the $80.00 threshold for the first time in two days.
Meanwhile, the US Dollar Index that measures the greenback’s performance against a basket of six peers is advancing 0.12%, currently at 94.48, whereas the US T-bond 10-year benchmark note rate is declining three basis points (bps), down to 1.566%, for the first time since the last week.
USD/CAD Price Forecast: Technical outlook
Daily chart
The USD/CAD is trading below the daily moving averages (DMA’s), suggesting the pair is in a downtrend. Momentum indicators, like the Relative Strength Index (RSI) at 36, edging lower, means another leg down could be on the cards.
To accelerate the downward trend, USD/CAD sellers need a daily close below 1.2445. In that outcome, the first support level would be 1.2421. A breach beneath the latter can push the pair towards the July 16 low at 1.2302.
On the flip side, a daily close above the 200-DMA at 1.2510 could pave the way for further gains. The first resistance would be 1.2600, immediately followed by the 50-DMA at 1.2622.
KEY ADDITIONAL LEVELS TO WATCH
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. The author will not be held responsible for information that is found at the end of links posted on this page.
If not otherwise explicitly mentioned in the body of the article, at the time of writing, the author has no position in any stock mentioned in this article and no business relationship with any company mentioned. The author has not received compensation for writing this article, other than from FXStreet.
FXStreet and the author do not provide personalized recommendations. The author makes no representations as to the accuracy, completeness, or suitability of this information. FXStreet and the author will not be liable for any errors, omissions or any losses, injuries or damages arising from this information and its display or use. Errors and omissions excepted.
The author and FXStreet are not registered investment advisors and nothing in this article is intended to be investment advice.
Recommended content
Editors’ Picks
EUR/USD edges lower toward 1.0700 post-US PCE
EUR/USD stays under modest bearish pressure but manages to hold above 1.0700 in the American session on Friday. The US Dollar (USD) gathers strength against its rivals after the stronger-than-forecast PCE inflation data, not allowing the pair to gain traction.
GBP/USD retreats to 1.2500 on renewed USD strength
GBP/USD lost its traction and turned negative on the day near 1.2500. Following the stronger-than-expected PCE inflation readings from the US, the USD stays resilient and makes it difficult for the pair to gather recovery momentum.
Gold struggles to hold above $2,350 following US inflation
Gold turned south and declined toward $2,340, erasing a large portion of its daily gains, as the USD benefited from PCE inflation data. The benchmark 10-year US yield, however, stays in negative territory and helps XAU/USD limit its losses.
Bitcoin Weekly Forecast: BTC’s next breakout could propel it to $80,000 Premium
Bitcoin’s recent price consolidation could be nearing its end as technical indicators and on-chain metrics suggest a potential upward breakout. However, this move would not be straightforward and could punish impatient investors.
Week ahead – Hawkish risk as Fed and NFP on tap, Eurozone data eyed too
Fed meets on Wednesday as US inflation stays elevated. Will Friday’s jobs report bring relief or more angst for the markets? Eurozone flash GDP and CPI numbers in focus for the Euro.