USD/CAD refreshes session tops, around 1.2070, bullish oil prices capping gains

USD/CAD gained some positive traction on Thursday amid a broad-based USD strength.
A modest uptick in the US bond yields, cautious mood extended some support to the USD.
Bullish oil prices might continue to underpin the loonie and cap the upside for the major.

Haresh Menghani FXStreet

The intraday USD buying picked up pace during the early European session and pushed the USD/CAD pair to fresh daily tops, around the 1.2065-70 region in the last hour.

A combination of supporting factors provided a goodish lift to the US dollar on Thursday. This, in turn, was seen as a key factor that assisted the USD/CAD pair to regain positive traction and reverse the previous day's modest losses.

Investors have grown nervous about whether a surprisingly stronger US economic data could force the Fed to start tapering its bond-buying program sooner rather than later. This, in turn, prompted some short-covering move around the USD.

The greenback was also supported by a modest uptick in the US Treasury bond yields. Apart from this, a softer risk tone around the equity markets further benefitted the greenback's safe-haven status and extended some support to the USD/CAD pair.

Bulls are now be looking to build on this week's bounce from the vicinity of the 1.2000 psychological mark, or the lowest level since May 2015. That said, bullish crude oil prices might act as a headwind for the USD/CAD pair and cap the upside.

In fact, WTI crude oil climbed to the highest level since October 2018 amid expectations of a surge in fuel demand in the US, Europe and China. This underpinned the commodity-lined loonie and might hold traders from placing aggressive bullish bets around the USD/CAD pair.

market participants now look forward to Thursday's US economic docket – featuring the releases of the ADP report on private-sector employment, the Initial Weekly Jobless Claims and ISM Services PMI. This, along with the US bond yields, will influence the USD.

Apart from this, the broader market risk sentiment and oil price dynamics might further contribute to produce some short-term trading opportunities around the USD/CAD pair.

Technical levels to watch

USD/CAD

Overview
Today last price	1.2064
Today Daily Change	0.0029
Today Daily Change %	0.24
Today daily open	1.2035

Trends
Daily SMA20	1.2091
Daily SMA50	1.2331
Daily SMA100	1.2494
Daily SMA200	1.2769

Levels
Previous Daily High	1.2092
Previous Daily Low	1.2029
Previous Weekly High	1.2142
Previous Weekly Low	1.2029
Previous Monthly High	1.2352
Previous Monthly Low	1.2013
Daily Fibonacci 38.2%	1.2053
Daily Fibonacci 61.8%	1.2068
Daily Pivot Point S1	1.2012
Daily Pivot Point S2	1.1989
Daily Pivot Point S3	1.195
Daily Pivot Point R1	1.2075
Daily Pivot Point R2	1.2114
Daily Pivot Point R3	1.2137

Author

Haresh Menghani

FXStreet

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

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