• Resurgent USD demand helps rebound sharply from 100-DMA support.
• Loonie further weighed down by a modest retracement in oil prices.
The USD/CAD pair caught some strong bids on Thursday and rallied back closer to the 1.3050 immediate hurdle, recovering losses recorded in the previous two trading sessions.
The pair managed to find decent support near the 100-day SMA, with resurgent US Dollar demand prompting some aggressive short-covering move and helping the pair to snap four consecutive days of losing streak.
Minutes of the Federal Reserve’s August meeting signaled broad support for another interest-rate hike in September and helped stall the recent USD sell-off, further aggravated by the latest US political drama.
Adding to this, fresh US-China trade-war fears provided an additional boost to the buck and further collaborated to the pair's goodish rebound on Thursday. Trade tensions between the world's two largest economies escalated further after both, the US and China implemented 25% tariffs on $16 billion worth of the imports from either side.
Meanwhile, a mildly softer tone around crude oil prices undermined demand for the commodity-linked currency - Loonie and remained supportive of the pair's strong bid tone through the early European session.
It, however, remains to be seen if the pair is able to build on the positive momentum or continues with the struggle to make it through the 1.3055-50 region, an important horizontal support break-point, now turned strong resistance.
Technical levels to watch
On a sustained move beyond the mentioned barrier, the pair is likely to dart towards reclaiming the 1.3100 handle en-route the next major hurdle near the 1.3135 zone. On the flip side, the key 1.30 psychological mark now seems to protect the immediate downside and is closely followed by 100-day SMA support near the 1.2985 region.
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 edges lower toward 1.0700 post-US PCE
EUR/USD stays under modest bearish pressure but manages to hold above 1.0700 in the American session on Friday. The US Dollar (USD) gathers strength against its rivals after the stronger-than-forecast PCE inflation data, not allowing the pair to gain traction.
GBP/USD retreats to 1.2500 on renewed USD strength
GBP/USD lost its traction and turned negative on the day near 1.2500. Following the stronger-than-expected PCE inflation readings from the US, the USD stays resilient and makes it difficult for the pair to gather recovery momentum.
Gold struggles to hold above $2,350 following US inflation
Gold turned south and declined toward $2,340, erasing a large portion of its daily gains, as the USD benefited from PCE inflation data. The benchmark 10-year US yield, however, stays in negative territory and helps XAU/USD limit its losses.
Bitcoin Weekly Forecast: BTC’s next breakout could propel it to $80,000 Premium
Bitcoin’s recent price consolidation could be nearing its end as technical indicators and on-chain metrics suggest a potential upward breakout. However, this move would not be straightforward and could punish impatient investors.
Week ahead – Hawkish risk as Fed and NFP on tap, Eurozone data eyed too
Fed meets on Wednesday as US inflation stays elevated. Will Friday’s jobs report bring relief or more angst for the markets? Eurozone flash GDP and CPI numbers in focus for the Euro.