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.

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).

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.

Feed news

Latest Forex News


Latest Forex News

Editors’ Picks

EUR/USD: Bears hold the grip, critical challenge at 1.2000

The greenback firmed up at the end of the week, closing it with substantial gains against most major rivals. Renewed coronavirus concerns and poor macroeconomic data spurred risk-off. EUR/USD is firmly bearish.

EUR/USD News

GBP/USD: Further restrictions in the UK may hit the pound

The GBP/USD pair trimmed most of its weekly gains on Friday and settled in the 1.3580 price zone, amid risk-off fueling dollar’s demand. UK GDP contracted by less than anticipated in November, Industrial Production plunged.

GBP/USD News

Gold: Further decline toward $1,800 remains on the cards

Gold failed to stage a convincing rebound this week. After losing more than 2% in the previous week, the XAU/USD pair extended its slide on Monday and touched its lowest level since early December at $1,817. 

Gold news

Darkest fefore dawn

The upcoming economic news is likely to be dreadful, and if it is not dreadful, it will be mostly ignored. This includes the release of the preliminary January PMI figures at the end of the week. Japan is extending its national emergency to another five prefectures, which collectively account for over half of the nation's GDP.

Read more

DXY breaks above key downtrend, eyes move above 91.00

USD has been strongly supported on what has shaped up to be a very much risk off final trading day of the week. Most G10/USD pairs have seen significant weakness, aside from CHF/USD and JPY/USD, given that the two currencies are also considered “safe havens”.

US Dollar Index News

Forex MAJORS

Cryptocurrencies

Signatures