- USD/CAD grinds near intraday high after posting the biggest daily fall in two weeks.
- Oil prices stabilize following a rebound from the 10-month low.
- Market’s anxiety ahead of the key data/events joins China’s Covid woes to challenge the Canadian Dollar.
USD/CAD picks up bids to refresh intraday high near 1.3380 during early Wednesday. The Loonie pair’s latest rebound could be linked to the market’s sour sentiment, as well as a pause in the WTI crude oil’s recovery moves. However, a cautious mood ahead of the key data/events challenges the pair buyers.
Risk appetite fades the previous day’s optimism as headlines suggesting a jump in China’s Covid numbers joined the Reserve Bank of New Zealand’s (RBNZ) utterly hawkish move to suggest that the global central banks aren’t out of steam. Additionally, anxiety ahead of the preliminary readings of November’s PMIs, the Federal Open Market Committee (FOMC) Meeting Minutes and the US Durable Goods Orders for October also weigh on the sentiment.
While portraying the mood, S&P 500 Futures print mild losses while the US 10-year Treasury yields struggle for clear directions near 3.75%.
It’s worth noting that prices of Canada’s biggest export-item WTI crude oil seesaw around $81.00 after bouncing off a 10-month low the previous day. The black gold rose the previous day amid fears of a supply crunch and talks of the oil price cap, as well as Saudi Arabia’s rejection to support the OPEC+ output increase signals.
On Tuesday, firmer sentiment and recovery in oil prices favored the USD/CAD bears. On the same line could be the upbeat prints of Canada’s Retail Sales for September. In doing so, the Loonie pair ignored firmer US data and hawkish comments from the US Federal Reserve (Fed) officials. That said, Richmond Fed Manufacturing Index improved to -9 for November versus -10 prior while Kansas City Federal Reserve President Esther George recently said, “(We) could well take a higher interest rate for some time to convince households to hold on to savings.”
Moving on, USD/CAD is likely to witness a sluggish day amid the market’s pre-event fears. However, traders will pay major attention to the oil fundamentals and the Fed Minutes for clear directions.
Technical analysis
A clear U-turn from the 21-DMA hurdle of 1.3466, as well as a downside break of the one-week-old ascending trend line, currently around 1.3390, keeps the USD/CAD bears hopeful of refreshing the monthly low surrounding 1.3230.
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 stays in positive territory above 1.0850 after US data
EUR/USD clings to modest daily gains above 1.0850 in the second half of the day on Friday. The improving risk mood makes it difficult for the US Dollar to hold its ground after PCE inflation data, helping the pair edge higher ahead of the weekend.
GBP/USD stabilizes above 1.2850 as risk mood improves
GBP/USD maintains recovery momentum and fluctuates above 1.2850 in the American session on Friday. The positive shift seen in risk mood doesn't allow the US Dollar to preserve its strength and supports the pair.
Gold rebounds above $2,380 as US yields stretch lower
Following a quiet European session, Gold gathers bullish momentum and trades decisively higher on the day above $2,380. The benchmark 10-year US Treasury bond yield loses more than 1% on the day after US PCE inflation data, fuelling XAU/USD's upside.
Avalanche price sets for a rally following retest of key support level
Avalanche (AVAX) price bounced off the $26.34 support level to trade at $27.95 as of Friday. Growing on-chain development activity indicates a potential bullish move in the coming days.
The election, Trump's Dollar policy, and the future of the Yen
After an assassination attempt on former President Donald Trump and drop out of President Biden, Kamala Harris has been endorsed as the Democratic candidate to compete against Trump in the upcoming November US presidential election.