USD/CAD hovers around the 20-day EMA around 1.3420s

USD/CAD struggles for direction as the US Dollar rises, while oil prices capped the upside.
US Treasury bond yields spurred the uptick in the US Dollar, keeping the USD/CAD above its 20-DMA.
Thursday’s US Consumer Price Index (CPI) and Jobless Claims would provide fresh impetus to USD/CAD traders.

Christian Borjon Valencia FXStreet

The USD/CAD registers minuscule losses in the mid-North American session after hitting a daily low of 1.3357. Market sentiment remains fragile, fluctuating, while a late bid in the US Dollar (USD) spurred a jump in the USD/CAD pair. At the time of writing, the USD/CAD is trading at 1.3424, slightly down by 0.14%.

USD/CAD is directionless, influenced by a strong US Dollar, high oil prices

US equities are seesawing amidst a mixed mood. The greenback is pairing some of its losses, according to the US Dollar Index (DXY), which measures the buck’s performance against a basket of peers, up 0.11%, at 103.281, underpinned by high US bond yields. The US 10-year benchmark note rate is climbing nine bps, to 3.630%, after US Federal Reserve (Fed) Chief Jerome Powell’s speech did not acknowledge the monetary policy.

Of late, Federal Reserve Governor Michell Bowman said that continued rate hikes are needed to curb inflation. She added that she’s looking for “convincing evidence” that inflation has peaked and that incoming data will influence her view on the size of interest rate hikes.

On the Canadian side, a staggering labor market report last Friday increased the likelihood of a 25 bps rate hike, according to TD Securities analysts. “Today’s report leaves the Bank of Canada in an uncomfortable position.” They added that deceleration in wages would not satisfy Bank of Canada’s (BoC) policymakers and stated, “we now look for the Bank to hike another 25bps to 4.50% in January. We expect that 4.50% will be the BoC’s terminal rate for this cycle.”

In the meantime, a jump in crude oil prices is putting a lid on the USD/CAD recovery as WTI climbs 0.86%, exchanging hands around $75.44 per barrel.

Ahead of the week, the US economic docket will feature the release of the Consumer Price Index (CPI) for December, alongside unemployment claims, on Thursday. An absent Canadian economic calendar would leave USD/CAD traders adrift to US Dollar dynamics.

USD/CAD Key Technical Levels

USD/CAD

Overview
Today last price	1.3427
Today Daily Change	0.0038
Today Daily Change %	0.28
Today daily open	1.3389

Trends
Daily SMA20	1.3576
Daily SMA50	1.3517
Daily SMA100	1.3479
Daily SMA200	1.3152

Levels
Previous Daily High	1.3446
Previous Daily Low	1.3357
Previous Weekly High	1.3685
Previous Weekly Low	1.3433
Previous Monthly High	1.3705
Previous Monthly Low	1.3385
Daily Fibonacci 38.2%	1.3391
Daily Fibonacci 61.8%	1.3412
Daily Pivot Point S1	1.3349
Daily Pivot Point S2	1.3308
Daily Pivot Point S3	1.326
Daily Pivot Point R1	1.3438
Daily Pivot Point R2	1.3486
Daily Pivot Point R3	1.3527

Author

Christian Borjon Valencia

FXStreet

Markets analyst, news editor, and trading instructor with over 14 years of experience across FX, commodities, US equity indices, and global macro markets.

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