USD/CAD rebounds swiftly from weekly lows, jumps above mid-1.2600s


  • USD/CAD staged a solid intraday bounce from sub-1.2600 levels, or weekly lows.
  • Surging US bond yields benefitted the USD and remained supportive of the move.
  • Bullish oil prices underpinned the loonie and kept a lid on any meaningful gains.

The USD/CAD pair rallied over 60 pips from weekly lows and jumped to fresh daily tops, beyond mid-1.2600s during the early North American session.

The pair showed some resilience below the 1.2600 round-figure mark and witnessed a dramatic intraday turnaround amid resurgent US dollar demand. A sudden pickup in the US Treasury bond yields provided a strong lift to the greenback, which, in turn, was seen as a key factor that prompted some short-covering around the USD/CAD pair.

A violent selloff in the US Treasuries took its toll on the global risk sentiment. This was evident from a steep fall in the equity markets, which provided an additional boost to the safe-haven greenback. The USD bulls seemed unaffected, rather shrugged off the disappointing release of the ADP report for February.

In fact, private-sector employers added 117K jobs during the reported month, fewer than 177K expected and the previous month's upwardly revised reading of 195K. The data pointed to a sluggish recovery in the labour market, though investors remained optimistic amid the progress on a massive US fiscal spending plan.

That said, bullish sentiment around crude oil prices, now up over 1.5% for the day, underpinned the commodity-linked loonie and capped gains for the USD/CAD pair. This makes it prudent to wait for a sustained move beyond the 1.2660 region before positioning for an extension of the recent bounce from multi-year lows.

Wednesday's US economic docket also features the release of the ISM Services PMI. This, along with the US bond yields and the broader market risk sentiment, will influence the USD. Traders might further take cues from oil prices dynamics to grab some meaningful opportunities.

Technical levels to watch

USD/CAD

Overview
Today last price 1.2654
Today Daily Change 0.0033
Today Daily Change % 0.26
Today daily open 1.2621
 
Trends
Daily SMA20 1.2678
Daily SMA50 1.2721
Daily SMA100 1.2871
Daily SMA200 1.3124
 
Levels
Previous Daily High 1.2698
Previous Daily Low 1.26
Previous Weekly High 1.273
Previous Weekly Low 1.2468
Previous Monthly High 1.287
Previous Monthly Low 1.2468
Daily Fibonacci 38.2% 1.2638
Daily Fibonacci 61.8% 1.2661
Daily Pivot Point S1 1.2582
Daily Pivot Point S2 1.2542
Daily Pivot Point S3 1.2484
Daily Pivot Point R1 1.268
Daily Pivot Point R2 1.2738
Daily Pivot Point R3 1.2777

 

 

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