USD/CAD on the offers around 1.2450, eyes on BOC

DXY depressed in Asia
WTI remains on the front foot.
A quiet NA session ahead.

Dhwani Mehta FXStreet

The USD/CAD pair extends its losing streak into a third day today, as a beleaguered US dollar combined with surging oil prices continue to keep the rates near 3-day troughs near 1.2440.

USD/CAD: Eyes on BOC verdict.

The spot remains suppressed and looks to test the 1.24 handle amid persistent weakness seen in around the US dollar across its major peers, as markets now believe that the Fed isn’t the only central bank to go for higher interest rates this year. The USD index drops -0.10% to 90.53, recovering slightly from three-year lows of 90.39.

On the CAD-side of the story, the prolonged rally in oil prices continues to keep the sentiment buoyed around the resource-linked Loonie, adding to the weight on the CAD pair. Meanwhile, better Canadian fundamentals back the case for a rate hike, when the Bank of Canada (BOC) meets to decide on its monetary policy this Wednesday.

“We expect the BoC to raise the overnight rate by 25bp at Wednesday's meeting. Clear signs of diminished labor market slack and an economy operating at full capacity should outweigh rising trade tensions with the US. Risks around a possible US withdrawal from NAFTA will likely once again be the biggest concern weighing on the BoC, but absent an imminent withdrawal notice, they should feel comfortable bumping up the overnight rate to its post-crisis high of 1.25%,” the RBC Capital Markets Research Team noted.

In the meantime, the USD price-action and broader market sentiment will play the main drivers amid holiday-thinned light trading ahead.

USD/CAD Technical View

The immediate support for the pair aligns at 1.2437 (daily low) ahead of 1.2400 (natural support) and 1.2377 (Jan 8 low). On the upside, resistances could be seen at 1.2469 (daily top), 1.2487 (5-DMA) and 1.2500 (round figure).

Author

Dhwani Mehta

FXStreet

Residing in Mumbai (India), Dhwani is a Senior Analyst and Manager of the Asian session at FXStreet. She has over 10 years of experience in analyzing and covering the global financial markets, with specialization in Forex and commodities markets.

AUD/USD sticks to positive bias above 0.7100; lacks bullish conviction

AUD/USD trades with a positive bias for the second straight day, holding above 0.7100 in the Asian session on Friday as softer US bond yields keep US Dollar bulls on the back foot. Furthermore, hawkish RBA Governor Bullock's comments boost rate hike bets and support the Aussie. However, the Fed's hawkish outlook, along with geopolitical uncertainties, limits USD losses and caps the pair.

USD/JPY approaches 158.00 as Japanese Yen resumes decline

USD/JPY is resuming its upside in the European session on Friday, refreshing two-week highs and nearing 158.00. The Japanese Yen extends losses, despite the Bank of Japan's (BoJ) expected rate hike to 1.25% and hawkish Governor Ueda's comments, as two surprise dissents against the rate hike weigh on it.

Gold keeps the bid tone in place; still below $4,400

Gold adds to the optimism seen in the second half of the week, trading with decent gains just below the $4,400 mark per troy ounce on Friday. The precious metal’s advance finds traction in declining crude oil prices and fresh selling pressure on the US Dollar.

Why altcoin season isn't coming back — and what stole its capital

If, after two years of being frozen in ice, Katara and Sokka woke you up to the crypto market, it would seem like 100 years have passed. With Bitcoin soaring to record highs just over a year ago, everyone expected a routine altcoin season, where investors take profits from the top crypto to chase higher returns in altcoins.

BoJ Recap: Not as hawkish as expected

The BoJ raised its short-term interest-rate target to 1.25% from 1.00% in a 7-2 vote, marking another step in the normalisation of monetary policy and widely matching what everyone has been expecting for weeks. Governor Kazuo Ueda said the policy phase had changed.

BoJ Recap: Not as hawkish as expected

The Bank of Japan (BoJ) raised its short-term interest-rate target to 1.25% from 1.00% in a 7-2 vote, marking another step in the normalisation of monetary policy and widely matching what everyone has been expecting for weeks.