USD/CAD rebounds swiftly from two-week lows, back above mid-1.3000s

A combination of factors prompted some selling for the second consecutive session.
The intraday downfall found decent support ahead of the 1.3000 psychological mark.
Bullish oil prices undermined the loonie and might keep a lid on any strong move up.

Haresh Menghani FXStreet

The USD/CAD pair found decent support ahead of the key 1.3000 psychological mark and has now recovered around 50 pips from two-week lows.

The pair witnessed some heavy selling during the first half of the trading action on Tuesday and broke through the 1.3040 horizontal support. The intraday fall was sponsored by renewed US dollar selling since the early European session and bullish crude oil prices, which tend to underpin demand for the commodity-linked currency.

The greenback remained depressed on the back of growing speculations that the Fed will ease monetary policy further in December amid concerns about the economic fallout from the ever-increasing coronavirus cases. Adding to this, the optimism over a potential COVID-19 vaccine further dented the greenback's relative safe-haven status.

On the other hand, the Canadian dollar benefitted from the ongoing bullish run in crude oil prices. Prospects of an early rollout of vaccine for the highly contagious coronavirus disease revived hopes for a swift recovery in fuel demand. This, in turn, pushed WTI crude oil prices to three-month tops, around the $43.50-55 region.

Meanwhile, a modest uptick in the US Treasury bond yields helped limit any further losses for the greenback and assisted the USD/CAD pair to attract some dip-buying near the 1.3000 mark. That said, the attempted recovery lacked any strong follow-through and thus, warrants some caution before positioning for any further appreciating move.

Tuesday's US economic docket features the releases of the Conference Board's Consumer Confidence Index and Richmond Manufacturing Index. The data might influence the USD, which, along with oil price dynamics will be looked upon for some short-term trading opportunities.

Technical levels to watch

USD/CAD

Overview
Today last price	1.3058
Today Daily Change	-0.0023
Today Daily Change %	-0.18
Today daily open	1.3081

Trends
Daily SMA20	1.3133
Daily SMA50	1.3194
Daily SMA100	1.3252
Daily SMA200	1.3533

Levels
Previous Daily High	1.3112
Previous Daily Low	1.3046
Previous Weekly High	1.3142
Previous Weekly Low	1.3034
Previous Monthly High	1.339
Previous Monthly Low	1.3081
Daily Fibonacci 38.2%	1.3071
Daily Fibonacci 61.8%	1.3087
Daily Pivot Point S1	1.3047
Daily Pivot Point S2	1.3013
Daily Pivot Point S3	1.298
Daily Pivot Point R1	1.3114
Daily Pivot Point R2	1.3147
Daily Pivot Point R3	1.3181

Author

Haresh Menghani

FXStreet

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

EUR/USD remains below 1.1850 after US data

EUR/USD struggles to gain traction and trades in a narrow range below 1.1850 on Wednesday. The US Dollar stays resilient against its rivals following the better-than-expected Durable Goods Orders and housing data, limiting the pair's upside ahead of FOMC Minutes.

GBP/USD stays in narrow channel above 1.3550 ahead of FOMC Minutes

GBP/USD holds its ground following Tuesday's slide and moves sideways above 1.3550 midweek. Although the data from the UK confirmed that inflation cooled in January, the positive shift seen in market mood helps the pair keep its footing as investors wait for the Fed to publish the minnutes of the January policy meeting.

Gold regains some shine, retargets $5,000 ahead of FOMC Minutes

Gold gathers fresh upside traction on Wednesday, leaving part of the weakness seen at the beginning of the week and refocusing its attention to the key $5,000 mark per troy ounce, all ahead of the release of the FOMC Minutes and despite the modest uptick in the US Dollar.

Fed Minutes to shed light on January hold decision amid hawkish rate outlook

The Minutes of the Fed’s January 27-28 monetary policy meeting will be published today. Details of discussions on the decision to leave the policy rate unchanged will be scrutinized by investors.

Mixed UK inflation data no gamechanger for the Bank of England

Food inflation plunged in January, but service sector price pressure is proving stickier. We continue to expect Bank of England rate cuts in March and June. The latest UK inflation read is a mixed bag for the Bank of England, but we doubt it drastically changes the odds of a March rate cut.

Top 3 Price Prediction: Bitcoin, Ethereum, and Ripple face downside risk as bears regain control

Bitcoin, Ethereum, and Ripple remain under pressure on Wednesday, with the broader trend still sideways. BTC is edging below $68,000, nearing the lower consolidating boundary, while ETH and XRP also declined slightly, approaching their key supports.