USD/CAD Price Analysis: Struggles to capitalize on its modest intraday gains beyond 1.3700

USD/CAD recovers further from the 50-day SMA and draws support from a combination of factors.
Sliding Crude Oil prices undermine the Loonie and act as a tailwind amid a modest USD strength.
The mixed technical setup warrants caution for bulls and before positioning for any further gains.

Haresh Menghani FXStreet

The USD/CAD pair attracts some buying on Thursday and sticks to its modest intraday gains, just below the 1.3700 round-figure mark through the first half of the European session.

Crude Oil prices drift lower for the third successive day, which is seen undermining the commodity-linked Loonie. This, along with a further US Dollar (USD) recovery from its lowest level since September 1 touched in the aftermath of the softer US CPI report on Tuesday, turns out to be another factor acting as a tailwind for the USD/CAD pair.

From a technical perspective, spot prices managed to defend the 50-day Simple Moving Average (SMA) support near the 1.3655 area on Wednesday and the subsequent move up favours bullish traders. That said, the lack of follow-through buying warrants caution before positioning for further gains amid bets that the Federal Reserve (Fed) is done hiking rates.

Moreover, oscillators on the daily chart have just started gaining negative traction. Hence, a convincing break below the 50-day SMA support will be seen as a fresh trigger for bearish traders and pave the way for deeper losses. The USD/CAD pair might then slide to the monthly low, around the 1.3630-1.3625 region, en route to the 1.3600 round figure.

On the flip side, a sustained strength beyond the 1.3710-1.3715 region could trigger an intraday short-covering move and lift spot prices to the next relevant hurdle near the 1.3750-1.3755 area. Any further move up, however, might still be seen as a selling opportunity and runs the risk of fizzling out rather quickly ahead of the 1.3800 round-figure mark.

The latter should act as a key pivotal point, which if cleared decisively will shift the near-term bias back in favour of bullish traders. The USD/CAD pair might then accelerate the momentum towards the next relevant hurdle near the 1.3870-1.3875 region en route to the 1.3900 mark, or the highest level since May 2020 touched on earlier this month.

USD/CAD daily chart

Technical levels to watch

USD/CAD

Overview
Today last price	1.3695
Today Daily Change	0.0013
Today Daily Change %	0.10
Today daily open	1.3682

Trends
Daily SMA20	1.3768
Daily SMA50	1.3657
Daily SMA100	1.3514
Daily SMA200	1.3506

Levels
Previous Daily High	1.371
Previous Daily Low	1.3655
Previous Weekly High	1.3855
Previous Weekly Low	1.3629
Previous Monthly High	1.3892
Previous Monthly Low	1.3562
Daily Fibonacci 38.2%	1.3676
Daily Fibonacci 61.8%	1.3689
Daily Pivot Point S1	1.3655
Daily Pivot Point S2	1.3627
Daily Pivot Point S3	1.3599
Daily Pivot Point R1	1.371
Daily Pivot Point R2	1.3738
Daily Pivot Point R3	1.3766

Author

Haresh Menghani

FXStreet

Haresh Menghani is a detail-oriented professional with 10+ years of extensive experience in analysing the global financial markets.

USD/JPY eyes August swing low, near 155.20 ahead of US NFP

USD/JPY retests the August monthly swing low during the Asian session on Friday as a more hawkish repricing of BoJ rate-hike bets and a suspected intervention continue to underpin the Japanese Yen. Meanwhile, the US Dollar is seen consolidating the previous day's heavy losses amid soft US bond yields, further weighing on the currency pair as traders keenly await the US NFP report.

AUD/USD consolidates above 0.7200; US NFP awaited

AUD/USD holds steady above 0.7200, near its highest level since mid-May, as bulls await the US NFP report for more cues on the Fed's policy path before placing fresh bets. Meanwhile, the recent decline in US bond yields keeps the US Dollar depressed near its lowest level in over a week and acts as a tailwind for the Aussie amid the RBA's hawkish tilt.

Gold tumbles as blockbuster US NFP lift US Dollar, Treasury yields

Gold (XAU/USD) falls sharply on Friday, snapping a two-day recovery after the US Nonfarm Payrolls (NFP) report surprised strongly to the upside. The metal briefly climbed above $4,500 on Thursday, gaining nearly 2%, but has since erased a large part of that advance.

Crypto’s $638 million buyback boom may not be as bullish as it looks

Decentralized Finance (DeFi) protocols reportedly spent $638 million to buy back their native tokens in August, up 17% from a year earlier. On the surface, the buyback trend suggests the cryptocurrency industry is maturing fast, adopting one of Wall Street’s oldest tools to bolster valuations and distribute revenue. The headline becomes less impressive once the number is opened up.

Why hawkish Bank of Japan expectations aren't enough to sustain the Japanese Yen rally

The Japanese Yen (JPY) experienced a sudden burst higher after falling back below the 160.00 psychological mark against the US Dollar (USD) earlier this week amid a more hawkish repricing of Bank of Japan (BoJ) rate hike expectations.

Diesel’s record $100 warning: The oil shock hiding in plain sight

The Oil market may look calmer than it did a few months ago, but diesel is sending a very different message. The US diesel crack spread, the premium of ultra-low sulphur diesel futures over WTI, recently surged above $100 per barrel for the first time, reaching an intraday record of just over $102.00.