USD/CAD rebounds towards 1.2550 as falling WTI prices offset USD decline

USD/CAD looks to retest multi-day highs, as weaker WTI lends support.
BOC reduces bond-buying, delivers optimism on the economy.
Powell downs the US dollar, all eyes now on US/Canadian data and Powell 2.0.

Dhwani Mehta FXStreet

USD/CAD is heading back towards the multi-day highs of 1.2549, bouncing off a brief dip to near the 1.2520 region.

A renewed selling wave seen in the US dollar across the curve dragged the major lower while the European traders reacted to the hawkish Bank of Canada (BOC) decision, as they hit their desks, fuelling the latest leg down in USD/CAD.

However, the recovery momentum remains intact amid falling WTI prices, especially in light of the latest Reuters reports, citing that Saudi Arabia and the United Arab Emirates had reached a compromise that should lead to an OPEC+ deal on oil output hike.

On Wednesday, the currency pair staged a blistering recovery rally after falling to five-day lows of 1.2429 on BOC’s taper announcement. The central bank n tapering its bond purchases to CAD2 billion per week in a sign of optimism about the pace of the economic recovery.

The downside in the spot was also aggravated by Fed Chair Jerome Powell’s dovish remarks, as he said that paring back of stimulus support is still distant, given that the economic progress is not there yet. Powell’s testimony triggered a fresh sell-off in the US dollar alongside the Treasury yields.

Looking ahead, all eyes remain on the US and Canadian jobs data ahead of Powell’s day 2 of the testimony. Meanwhile, the covid updates and oil price action will be also closely followed for fresh trading opportunities in the CAD pair.

USD/CAD: Technical levels

USD/CAD

Overview
Today last price	1.2530
Today Daily Change	0.0024
Today Daily Change %	0.19
Today daily open	1.2507

Trends
Daily SMA20	1.2402
Daily SMA50	1.2224
Daily SMA100	1.2375
Daily SMA200	1.2633

Levels
Previous Daily High	1.2526
Previous Daily Low	1.2427
Previous Weekly High	1.259
Previous Weekly Low	1.2303
Previous Monthly High	1.2487
Previous Monthly Low	1.2007
Daily Fibonacci 38.2%	1.2465
Daily Fibonacci 61.8%	1.2488
Daily Pivot Point S1	1.2447
Daily Pivot Point S2	1.2387
Daily Pivot Point S3	1.2347
Daily Pivot Point R1	1.2547
Daily Pivot Point R2	1.2587
Daily Pivot Point R3	1.2647

Author

Dhwani Mehta

FXStreet

Residing in Mumbai (India), Dhwani is a Senior Analyst and Manager of the Asian session at FXStreet. She has over 10 years of experience in analyzing and covering the global financial markets, with specialization in Forex and commodities markets.

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