USD/CAD licks BoC-inflicted losses below 1.3400 amid softer Oil price, downbeat US Dollar

USD/CAD remains pressured for the third consecutive day at the lowest level in a month.
BoC traces RBA’s moves to surprise market with 0.25% rate hike to tame inflation woes.
WTI crude oil remains depressed on demand-supply fears, ignores US Dollar’s two-day losing streak.
Speech from BoC’s Beaudry, Canada employment data eyed ahead of next week’s FOMC.

Anil Panchal FXStreet

USD/CAD fades bounce off intraday low as it drops to 1.3360 heading into Thursday’s European session, after refreshing the monthly bottom at 1.3320 the previous day. In doing so, the Loonie pair cheers the US Dollar weakness while paying little heed to the mildly offered WTI crude oil price, which is Canada’s main export earner.

On Wednesday, the Bank of Canada (BoC) surprised markets by announcing 25 basis points (bps) increase to increase the benchmark interest rate, to 4.75%, versus market expectations supporting no change in the previous rate of 4.50%. In its policy statement, the BoC said that concerns have increased that Consumer Price Index (CPI) inflation could get stuck materially above the 2% target. That said, the BoC statement appeared dovish as it removed the April language about how the Canadian central bank is prepared to raise rates further if needed.

Elsewhere, WTI crude oil prints mild losses near $72.50 while failing to extend the previous day’s corrective bounce, eyes the second consecutive weekly loss. In doing so, black gold bears the burden of the market’s fears of slower economic growth due to hawkish central bank actions.

It should be noted, however, that the US Dollar Index (DXY) remains pressured despite jittery markets amid the latest increase in the bets on the Federal Reserve’s 25 bps rate hike in July, even as the June Federal Open Market Committee (FOMC) is likely to keep the rates unchanged.

Against this backdrop, S&P500 Futures extend Wednesday’s losses to 4,265, down 0.25% intraday, whereas the US 10-year Treasury bond yields grind near 3.79% after rising the most in five weeks the previous day.

Looking ahead, comments from Bank of Canada (BoC) Deputy Governor Paul Beaudry and Canada’s monthly jobs report will be the key to watching for clear directions ahead of next week’s Fed meeting.

Technical analysis

Despite the latest weakness, the USD/CAD pair is yet to smash a seven-month-old ascending support line, around 1.3330 at the latest, which in turn joins the nearly oversold RSI (14) line to suggest a corrective bounce in price.

Additional important levels

Overview
Today last price	1.3354
Today Daily Change	-0.0015
Today Daily Change %	-0.11%
Today daily open	1.3369

Trends
Daily SMA20	1.3509
Daily SMA50	1.3495
Daily SMA100	1.3517
Daily SMA200	1.3512

Levels
Previous Daily High	1.3427
Previous Daily Low	1.3321
Previous Weekly High	1.3651
Previous Weekly Low	1.3407
Previous Monthly High	1.3655
Previous Monthly Low	1.3315
Daily Fibonacci 38.2%	1.3361
Daily Fibonacci 61.8%	1.3386
Daily Pivot Point S1	1.3318
Daily Pivot Point S2	1.3266
Daily Pivot Point S3	1.3212
Daily Pivot Point R1	1.3424
Daily Pivot Point R2	1.3478
Daily Pivot Point R3	1.3529

Author

Anil Panchal

FXStreet

Anil Panchal has nearly 15 years of experience in tracking financial markets. With a keen interest in macroeconomics, Anil aptly tracks global news/updates and stays well-informed about the global financial moves and their implications.

GBP/USD loses momentum, flirts with 1.3200

GBP/USD is struggling to maintain its positive bias on Thursday, retreating toward the 1.3200 region in response to the pick in the buying interest around the Greenback. That said, Cable remains under scrutiny as cautious market sentiment keeps investors focused on the US-Iran conflict and political effervescence in the UK.

EUR/USD trims gains, challenges 1.1400

EUR/USD now gives away part of its earlier advance, receding toward the 1.1400 contention zone on Thursday. Meanwhile, the pair’s recovery comes amid extra losses in the US Dollar, at the time when while investors continue to monitor developments in the Middle East and sentiment surrounding global technology stocks.

Gold remains bid and close to $4,100

Gold accelerates its recovery and approaches the key $4,000 mark per troy ounce at the end of the week, adding to Thursday’s advance. However, expectations for a hawkish Fed remain steady and keep the yellow metal’s potential upside contained.

Crypto Today: Bitcoin at $60,000, Ethereum at $1,500, and XRP at $1 face a make-or-break test

Bitcoin (BTC), Ethereum (ETH), and Ripple (XRP) are trading in the red on Friday after three consecutive days of losses, testing their respective make-or-break support levels.

Week ahead – NFP report to challenge Dollar strength and the hawkish Fed

Dollar strength dominates markets, as the hawkish Fed overshadows geopolitics and lower oil prices. NFP week could drive September Fed hike expectations and boost market volatility. The euro lacks fresh bullish catalysts, all eyes on the preliminary inflation report and the ECB Forum.

Regime change: Inside Kevin Warsh's first move to make the Fed unreadable on purpose

The rate did not move. That was the least interesting thing about Kevin Warsh's first meeting in charge of the Fed. The FOMC held its benchmark at 3.50%-3.75% for the fourth straight meeting, exactly as priced, and then the new chair used his first press conference to dismantle the machinery the market has leaned on for a decade.