USD/CAD picks up bids around mid-1.2600s with eyes on BOC, US stimulus

USD/CAD refreshes intraday high while consolidating recent losses.
US dollar regains amid cautious sentiment ahead of the much-awaited fiscal relief.
Upbeat comments from Yellen, wait for BOC also favor the bulls.
BOC is expected to keep monetary policy unchanged, US CPI, oil inventories will also be important to watch.

Anil Panchal FXStreet

USD/CAD rises to 1.2650, up 0.07% intraday, during Wednesday’s Asian session. The quote dropped the heaviest since the month-start drop the previous day amid the broad US dollar weakness and risk-on mood. However, weakness in oil prices and cautious mood in the market ahead of the key events seem to have triggered the latest corrective pullback.

Although US Treasury Secretary Janet Yellen promised $350 billion to local and state governments “as soon as possible”, also cited strong recovery hopes in 2021, global investors aren’t impressed. The reason could be traced from the US House where policymakers are jostling with the final details of the $1.9 trillion coronavirus (COVID-19) aid package, backed by US President Joe Biden.

It should be noted that the USD/CAD traders may have considered the latest weakness in oil prices, key export of Canada, as well as pre-BOC sentiment, to portray the latest upside. WTI refreshed the weekly low during a two-day pullback from a multi-month high on Tuesday as the Energy Information Administration (EIA) expected a reduction in the global oil demand growth by 60,000 barrels per day (bpd) to 5.32 million bpd in 2021, per Reuters.

It’s worth mentioning that the US dollar tracked 10-year Treasury yields to the south the previous day and favored commodities as well as Antipodeans amid risk-on mood.

Moving on, USD/CAD traders should keep their eyes on the US stimulus headlines for fresh impulse while the monetary policy updates from the Bank of Canada (BOC) as well as the US Consumer Price Index (CPI) will also be the key to watch.

Overall, USD/CAD is likely to remain depressed as risks may get a boost from the US covid aid package. Though, Treasury yield moves will be important to follow.

Technical analysis

A downside break of the two-week-old ascending trend line joins sustained trading below a downward sloping resistance line from January 28 to favor USD/CAD bears.

Additional important levels

Overview
Today last price	1.2649
Today Daily Change	9 pips
Today Daily Change %	0.07%
Today daily open	1.264

Trends
Daily SMA20	1.2652
Daily SMA50	1.2702
Daily SMA100	1.2845
Daily SMA200	1.3099

Levels
Previous Daily High	1.2686
Previous Daily Low	1.259
Previous Weekly High	1.274
Previous Weekly Low	1.2575
Previous Monthly High	1.287
Previous Monthly Low	1.2468
Daily Fibonacci 38.2%	1.2627
Daily Fibonacci 61.8%	1.2649
Daily Pivot Point S1	1.2592
Daily Pivot Point S2	1.2544
Daily Pivot Point S3	1.2497
Daily Pivot Point R1	1.2687
Daily Pivot Point R2	1.2734
Daily Pivot Point R3	1.2783

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.

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