• USD/CAD gained positive traction on Thursday and built on the overnight bounce a multi-week low.
  • Retreating oil prices undermined the loonie and provided a modest lift amid a modest USD strength.
  • Hawkish Fed expectations, rising US bond yields, cautious market mood all benefitted the greenback.

The USD/CAD pair continued scaling higher through the first half of the European session and climbed to a two-day high, around the 1.2685 region in the last hour.

A combination of factors assisted the USD/CAD pair to build on the previous day's post-BoC recovery move from the 1.2600 neighbourhood and gain some positive traction on Thursday. The Bank of Canada held interest rate at 0.25% and stuck to its guidance that a first hike could come in the middle quarters of 2022. The BoC, however, warned that the Omicron coronavirus variant has created renewed uncertainty, which seemed to be the only factor that weighed on the Canadian dollar.

Meanwhile, crude oil prices struggled to find acceptance above the $73.00/barrel mark and witnessed a modest pullback from a two-week high touched earlier this Thursday. This further undermined the commodity-linked loonie and provided a goodish lift to the USD/CAD pair amid a modest pickup in the US dollar demand. A further rise in the US Treasury bond yields, bolstered by hawkish Fed expectations, along with the cautious market mood extended some support to the safe-haven greenback.

Investors seem convinced that the Fed would tighten its monetary policy sooner rather than later to contain stubbornly high inflation and have been pricing in the possibility for liftoff in May 2022. This was seen as a key factor that pushed the yield on the benchmark 10-year US government bond back above the 1.50% threshold. Adding to this, escalating geopolitical tensions overshadowed the recent optimism in the markets and acted as a tailwind for safe-haven currencies, including the USD.

Market participants now look forward to the US economic docket, featuring the release of the usual Weekly Initial Jobless Claims. Traders will further take cues from the US bond yields and the broader market risk sentiment, which will drive the USD demand. Apart from this, oil price dynamics should provide some impetus to the USD/CAD pair. The key focus, however, will remain on Friday's release of the US consumer inflation figures, which will help determine the next leg of a directional move.

Technical levels to watch


Today last price 1.2678
Today Daily Change 0.0028
Today Daily Change % 0.22
Today daily open 1.265
Daily SMA20 1.268
Daily SMA50 1.2539
Daily SMA100 1.258
Daily SMA200 1.2477
Previous Daily High 1.2666
Previous Daily Low 1.2608
Previous Weekly High 1.2846
Previous Weekly Low 1.2713
Previous Monthly High 1.2837
Previous Monthly Low 1.2352
Daily Fibonacci 38.2% 1.2644
Daily Fibonacci 61.8% 1.263
Daily Pivot Point S1 1.2617
Daily Pivot Point S2 1.2582
Daily Pivot Point S3 1.2558
Daily Pivot Point R1 1.2676
Daily Pivot Point R2 1.2701
Daily Pivot Point R3 1.2735



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.

Feed news Join Telegram

Recommended content

Recommended content

Editors’ Picks

EUR/USD extends slide toward mid-1.0200s after US data

EUR/USD extends slide toward mid-1.0200s after US data

EUR/USD continues to decline toward 1.0250 during the American trading hours on Friday. After the data published by the UOM showed that the long-run inflation outlook rose to 3% in August from 2.9% in July, the dollar gathered strength against its rivals, weighing on the pair.


GBP/USD pushes lower 1.2100 on broad dollar strength

GBP/USD pushes lower 1.2100 on broad dollar strength

GBP/USD is trading deep in negative territory near 1.2100 during the American session on Friday. With the UoM's Consumer Sentiment Survey pointing to a modest increase in the long-run inflation outlook, the US Dollar Index extended its rally, reflecting a broad dollar strength.


Gold clings to modest gains above $1,790

Gold clings to modest gains above $1,790

Gold stays relatively resilient on Friday and trades modestly higher on the day above $1,790. Although the greenback continues to outperform its rivals on the latest US data, falling US Treasury bond yields help XAU/USD hold in positive territory.

Gold News

Shiba Inu ready to go ballistic: Shiba Eternity released in Vietnam

Shiba Inu ready to go ballistic: Shiba Eternity released in Vietnam

Shytoshi Kusama, the project leader of Shiba Inu announced the launch of Shiba Eternity for Vietnamese players. The game is available for testing and the team has asked users for their review. 

Read more

FXStreet Premium users exceed expectations

FXStreet Premium users exceed expectations

Tap into our 20 years Forex trading experience and get ahead of the markets. Maximize our actionable content, be part of our community, and chat with our experts. Join FXStreet Premium today!