USD/CAD rebounds from 1.2450 back towards 1.2500 despite hotter than expected inflation and higher oil prices


  • USD/CAD has rebounded after briefly dipping below 1.2450 to near 1.2500 despite hotter than expected inflation and higher oil prices.
  • Technical support and fading momentum after good recent performance likely explain CAD’s struggles to keep pace with AUD and NZD.

Despite an upside inflation surprise that will likely trigger further speculation about a surprise BoC rate hike next week and further crude oil price upside on Wednesday, USD/CAD was not able to sustainably break below 1.2450. Indeed, the Canadian dollar lags its antipodean counterparts in terms of on-the-day performance and is currently up just 0.1% on the day against the buck versus gains of over 0.5% for the kiwi and Aussie.

The loonie difficulties to keep pace with its non-US dollar peers seem to be driven by technical buying in USD/CAD after the pair bounced at last week’s 1.2450 low, combined with a reluctance to break convincingly below the 200DMA, which resides at bang on 1.2500. At present, the pair trades just under 1.2500.

Waning momentum/difficulties to keep the bearish drive in USD/CAD alive shouldn’t be to surprising given the fact that, on the month, CAD is amongst the best performing G10 currencies and has already come a long way. USD/CAD is already lower by about 1.2% on the month and is over 2.0% below this month’s highs above 1.2800.

Technical support aside, however, with crude oil prices substantially above last week’s levels (when USD/CAD last tested 1.2450) and following further strong domestic data, the case for a lower USD/CAD remains strong. Traders well may see rallies as an opportunity to sell and even if the buck does continue to broadly strengthen this week, are unlikely to express bullish USD views against the loonie so long as the threat of a surprise BoC hike is on the table.

USD/Cad

Overview
Today last price 1.249
Today Daily Change -0.0028
Today Daily Change % -0.22
Today daily open 1.2518
 
Trends
Daily SMA20 1.2685
Daily SMA50 1.2706
Daily SMA100 1.2623
Daily SMA200 1.2502
 
Levels
Previous Daily High 1.2564
Previous Daily Low 1.2486
Previous Weekly High 1.2698
Previous Weekly Low 1.2454
Previous Monthly High 1.2964
Previous Monthly Low 1.2608
Daily Fibonacci 38.2% 1.2516
Daily Fibonacci 61.8% 1.2534
Daily Pivot Point S1 1.2481
Daily Pivot Point S2 1.2445
Daily Pivot Point S3 1.2404
Daily Pivot Point R1 1.2559
Daily Pivot Point R2 1.26
Daily Pivot Point R3 1.2636

 

 

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