USD/CAD rebounds back towards 21DMA near 1.2830 despite hot Canadian inflation figures


  • USD/CAD has bounced from 1.2800 level to consolidate around 21DMA near 1.2830 amid broadly downbeat sentiment and crude price weakness.
  • The pair only got a very short-lived boost from hotter than forecast Canadian CPI figures for April.

Hotter than anticipated headline and core Canadian Consumer Price Inflation figures for April that strongly support the case for rapid BoC tightening in the coming quarters have failed to give the loonie a lasting lift. In wake of the data, which was released at 1330BST, USD/CAD dipped towards but was unable to test the 1.2800 level and has since reversed higher into the 1.2830s, where it trades with gains on the day of about 0.2%.

A pullback in crude oil prices and downside across the global equity space as macro sentiment takes a turn for the worse is the major culprit weighing on the loonie intra-day and benefitting the safe-haven US dollar. There might also be some profit-taking in play, with USD/CAD has fallen about 1.8% in just the last three sessions alone after printing its highest levels since November 2020 last week near 1.3100.

The economic calendar is quiet for the rest of the week aside from a few tier two US data releases (like the May Philadelphia Fed manufacturing survey on Thursday). That suggests broader risk appetite and price action in crude oil markets will remain the driving forces of USD/CAD. The pair, for now, seems content to consolidate around its 21-Day Moving Average in the 1.2830 area and, if it is to break lower towards the next area of support around 1.2700, there is probably going to need to be a sustained bounce in risk appetite and crude prices.

In wake of Fed Chair Jerome Powell’s hawkish remarks on Tuesday, fears about aggressive Fed tightening at a time when global economic growth is quickly slowing may prevent any such rebound in global sentiment. As a recap, the main message from the Fed Chair (and other Fed policymakers who have spoken this week) was that the central bank remains hyper-focused on tackling sky-high inflation and will not hesitate to move rates above so-called neutral (i.e. the 2.5% area) if required.

USD/Cad

Overview
Today last price 1.2827
Today Daily Change 0.0015
Today Daily Change % 0.12
Today daily open 1.2812
 
Trends
Daily SMA20 1.2834
Daily SMA50 1.2694
Daily SMA100 1.269
Daily SMA200 1.2655
 
Levels
Previous Daily High 1.2859
Previous Daily Low 1.2807
Previous Weekly High 1.3077
Previous Weekly Low 1.2893
Previous Monthly High 1.288
Previous Monthly Low 1.2403
Daily Fibonacci 38.2% 1.2827
Daily Fibonacci 61.8% 1.2839
Daily Pivot Point S1 1.2793
Daily Pivot Point S2 1.2774
Daily Pivot Point S3 1.2741
Daily Pivot Point R1 1.2845
Daily Pivot Point R2 1.2878
Daily Pivot Point R3 1.2897

 

 

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