• USD/CAD witnessed some selling in reaction to hotter-than-expected Canadian CPI figures.
  • A goodish bounce in oil prices further underpinned the loonie and added to the selling bias.
  • A subdued USD demand did little to influence as the focus remains on the FOMC minutes.

The USD/CAD pair refreshed daily lows in reaction to hotter-than-expected Canadian consumer inflation figures, with bears now looking to extend the momentum further below the 1.2600 mark.

Following a brief consolidation through the early North American session, the USD/CAD pair witnessed some selling after the headline Canadian CPI smashed expectations and rose 0.6% in July. The yearly rate also surpassed consensus estimates and came in at 3.3%, making a notable increase from the 2.7% recorded in June.

Adding to this, the Bank of Canada's core CPI (excluding the most volatile items) climbed 0.6% MoM and 3.3% YoY, again beating estimates for a reading of 0.1% and 2.8%, respectively. Apart from this, a goodish rebound in crude oil prices underpinned the commodity-linked loonie and exerted some pressure on the USD/CAD pair.

On the other hand, diminishing odds for an early policy tightening by the Fed kept the US dollar bulls on the defensive. This was seen as another factor that dragged the USD/CAD pair lower, marking the first day of a negative move in the previous three. That said, a combination of factors helped limit any further losses.

Worries about the economic fallout from the fast-spreading Delta variant of the coronavirus, along with political tensions in Afghanistan weighed on investors' sentiment. Adding to this, a strong pickup in the US Treasury bond yields, acted as a tailwind for the safe-haven USD and extended some support to the USD/CAD pair.

Moreover, investors also seemed reluctant to place any aggressive bets, rather preferred to wait for fresh impetus from Wednesday's release of the FOMC meeting minutes. Nevertheless, the USD/CAD pair has now eroded a part of the overnight gains to four-week lows, though the lack of follow-through selling warrants caution for bearish traders.

Technical levels to watch

USD/CAD

Overview
Today last price 1.2611
Today Daily Change -0.0017
Today Daily Change % -0.13
Today daily open 1.2628
 
Trends
Daily SMA20 1.2539
Daily SMA50 1.2448
Daily SMA100 1.2369
Daily SMA200 1.256
 
Levels
Previous Daily High 1.2649
Previous Daily Low 1.257
Previous Weekly High 1.2589
Previous Weekly Low 1.2489
Previous Monthly High 1.2808
Previous Monthly Low 1.2303
Daily Fibonacci 38.2% 1.2619
Daily Fibonacci 61.8% 1.26
Daily Pivot Point S1 1.2582
Daily Pivot Point S2 1.2536
Daily Pivot Point S3 1.2502
Daily Pivot Point R1 1.2661
Daily Pivot Point R2 1.2695
Daily Pivot Point R3 1.2741

 

 

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