- USD/CAD eases from a one-month high following the release of upbeat Canadian Retail Sales.
- Weaker crude oil prices could undermine the loonie and offer support amid a stronger greenback.
- The technical set-up favours bullish traders and supports prospects for further near-term gains.
The USD/CAD pair climbs to a one-month high during the early North American session, albeit struggles to capitalize on the move beyond the 1.3000 psychological mark. The pair trims a part of its intraday gains and is currently placed around the 1.2980-1.2975 region, still up over 0.20% for the day.
The upbeat Canadian Retail Sales figures for June offers some support to the domestic currency and act as a headwind for spot prices. That said, a weaker tone around crude oil prices should keep a lid on any meaningful upside for the commodity-linked loonie. Apart from this, the ongoing US dollar rally to its highest level since mid-July favours bullish traders and supports prospects for a further appreciating move for the USD/CAD pair.
From a technical perspective, the overnight move beyond the 1.2980-1.2985 hurdle, which coincides with the 50% Fibonacci retracement level of the July-August downfall, adds credence to the positive outlook. Furthermore, oscillators on the daily chart have just started moving into bullish territory. This, in turn, suggests that the path of least resistance for the USD/CAD pair is to the upside and dips are likely to get bought into.
Traders, however, might now wait for sustained strength beyond the 1.3000 mark before placing fresh bullish bets. The USD/CAD pair could then climb to the 61.8% Fibo. level, around the 1.3035 zone and extend the momentum further towards the next relevant hurdle near the 1.3080 area. Some follow-through buying, leading to a subsequent move above the 1.3100 mark, would mark a fresh breakout and pave the way for additional gains.
On the flip side, the 1.2930-1.2920 resistance breakpoint (38.2% Fibo. level) now seems to protect the immediate downside ahead of the 1.2900 round-figure mark. Any further decline is more likely to find decent support and remain limited near the 23.6% Fibo. level, around the 1.2845-1.2840 region. Failure to defend the said support level would negate any near-term positive bias and turn the USD/CAD pair vulnerable to slide further.
The downward trajectory could then drag spot prices to the 1.2800 round-figure mark en route to the very important 200 DMA support, currently near the 1.2755 region. This is followed by the monthly low, around the 1.2730-1.2725 region, which should act as a pivotal point. A convincing break below would be seen as a fresh trigger for bears.
USD/CAD daily chart
Key levels to watch
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 extends gains above 1.0700, focus on key US data
EUR/USD meets fresh demand and rises toward 1.0750 in the European session on Thursday. Renewed US Dollar weakness offsets the risk-off market environment, supporting the pair ahead of the key US GDP and PCE inflation data.
USD/JPY keeps pushing higher, eyes 156.00 ahead of US GDP data
USD/JPY keeps breaking into its highest chart territory since June of 1990 early Thursday, recapturing 155.50 for the first time in 34 years as the Japanese Yen remains vulnerable, despite looming intervention risks. The focus shifts to Thursday's US GDP report and the BoJ decision on Friday.
Gold closes below key $2,318 support, US GDP holds the key
Gold price is breathing a sigh of relief early Thursday after testing offers near $2,315 once again. Broad risk-aversion seems to be helping Gold find a floor, as traders refrain from placing any fresh directional bets on the bright metal ahead of the preliminary reading of the US first-quarter GDP due later on Thursday.
Injective price weakness persists despite over 5.9 million INJ tokens burned
Injective price is trading with a bearish bias, stuck in the lower section of the market range. The bearish outlook abounds despite the network's deflationary efforts to pump the price.
US Q1 GDP Preview: Economic growth set to remain firm in, albeit easing from Q4
The United States Gross Domestic Product (GDP) is seen expanding at an annualized rate of 2.5% in Q1. The current resilience of the US economy bolsters the case for a soft landing.