USD/CAD marches towards 1.3000 as yields propel DXY, oil eases ahead of Canada Retail Sales


  • USD/CAD takes the bids to renew two-week high, up for the third consecutive day.
  • US 10-year Treasury yields rise to fresh one-month peak on hawkish Fed bets, recession woes.
  • Fears of less energy demand, firmer US dollar weigh on the oil prices.
  • Canada Retail Sales for July can favor buyers ahead of next week’s Jackson Hole Symposium.

USD/CAD buyers approach the monthly high while refreshing the daily peak around 1.2970 during the initial hour of Friday’s European trading session. In doing so, the Loonie pair takes clues from the firmer US dollar, as well as softer prices of Canada’s main export item, namely WTI crude oil.

That said, the US Dollar Index (DXY) run up towards refreshing the monthly top near 107.70 as the market’s fears of economic slowdown in China and Europe, the Sino-American tussles, as well as hawkish Fedspeak. While underpinning the greenback’s gauge, the US 10-year Treasury yields reverse the previous day’s retreat from the monthly high to 2.928% by the press time, renewing a one-month high.

Elsewhere, WTI crude oil remains pressured around the intraday low of $89.30 as fears of economic slowdown weigh on the energy benchmark. Also exerting downside pressure on the black gold is the firmer US dollar and hopes that the Organization of the Petroleum Exporting Countries (OPEC) and allies, collectively known as OPEC+, could ease the output crunch, as recently signaled by Saudi Arabia.

On Thursday, Philadelphia Fed Manufacturing Survey rallied to 6.2 for August versus -5 expected and -12.3 prior while the weekly Initial Jobless Claims dropped to 250K, below 265K market consensus and 252K revised prior.

Following the data, San Francisco Fed President Mary Daly backed either 50 basis points or a 75 basis points hike while signaling the move for the September rate decision whereas Minneapolis Federal Reserve Neel Kashkari mentioned that, per Reuters, he does not believe the county is currently in a recession. Further, the all-time hawk St. Louis Fed President James Bullard said he is leaning towards another 75 bps rate hike in September.

Looking forward, Canadian Retail Sales for July, expected 0.3% MoM versus 2.2% prior, will be important for intraday USD/CAD traders. However, the market’s anxiety ahead of next week’s Fed Chair Jerome Powell’s speech at the Jackson Hole Symposium could keep the Loonie pair directed towards the north.

Technical analysis

The firmer RSI (14) and the bullish MACD signals join the pair’s successful trading above the 21-DMA level of 1.2860, as well as the one-week-old support line near 1.2880, to keep USD/CAD bulls hopeful. That said, a downward sloping resistance line from July 19, close to 1.2980-85 challenges the intraday buyers ahead of the 1.3000 psychological magnet.

Additional important levels

Overview
Today last price 1.2969
Today Daily Change 0.0018
Today Daily Change % 0.14%
Today daily open 1.2951
 
Trends
Daily SMA20 1.2857
Daily SMA50 1.2908
Daily SMA100 1.2815
Daily SMA200 1.2754
 
Levels
Previous Daily High 1.2967
Previous Daily Low 1.288
Previous Weekly High 1.295
Previous Weekly Low 1.2728
Previous Monthly High 1.3224
Previous Monthly Low 1.2789
Daily Fibonacci 38.2% 1.2934
Daily Fibonacci 61.8% 1.2914
Daily Pivot Point S1 1.2899
Daily Pivot Point S2 1.2846
Daily Pivot Point S3 1.2812
Daily Pivot Point R1 1.2985
Daily Pivot Point R2 1.3019
Daily Pivot Point R3 1.3072

 

 

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