• Sliding US bond yields kept the USD bulls on the defensive and capped the upside for USD/CAD.
  • An uptick in crude oil prices underpinned the loonie and did little to lend any support to the major.

The USD/CAD pair extended its sideways consolidative price action through the early European session and remained confined in a range above mid-1.2000s.

The pair continued with its struggle to register any meaningful recovery and languished near the lowest level since May 2015 amid the prevalent bearish sentiment surrounding the US dollar. The ongoing decline in the US Treasury bond yields kept the USD bulls on the defensive. Apart from this, the underlying bullish sentiment in the financial markets further acted as a headwind for the safe-haven greenback.

Meanwhile, the USD bulls failed to gain any respite from firming expectations that the Fed could taper its emergency stimulus measures amid signs of rising inflationary pressure. The market speculations were further fueled by Friday's encouraging PMI reports, which indicated that the business activity in the private sector expanded at a record-setting pace in May and that price pressures continued to increase sharply.

On the other hand, some follow-through uptick in crude oil prices underpinned the commodity-linked loonie, which remained well supported by a more hawkish Bank of Canada. It is worth recalling that the BoC reduced its weekly asset purchases at the April policy meeting and also brought forward the guidance for the first interest rate hike to the second half of 2022. This further collaborated to cap gains for the USD/CAD pair.

From a technical perspective, the recent price action might still be categorized as a consolidation phase. This, along with the USD/CAD pair's inability to gain any meaningful traction, suggests that the near-term bearish trend might still be far from being over. This, in turn, supports prospects for a further near-term depreciating move amid absent relevant market-moving economic releases, either from the US or Canada.

Technical levels to watch

USD/CAD

Overview
Today last price 1.2058
Today Daily Change -0.0009
Today Daily Change % -0.07
Today daily open 1.2067
 
Trends
Daily SMA20 1.2191
Daily SMA50 1.24
Daily SMA100 1.2545
Daily SMA200 1.2813
 
Levels
Previous Daily High 1.2095
Previous Daily Low 1.2028
Previous Weekly High 1.2144
Previous Weekly Low 1.2013
Previous Monthly High 1.2654
Previous Monthly Low 1.2266
Daily Fibonacci 38.2% 1.2069
Daily Fibonacci 61.8% 1.2053
Daily Pivot Point S1 1.2032
Daily Pivot Point S2 1.1996
Daily Pivot Point S3 1.1965
Daily Pivot Point R1 1.2099
Daily Pivot Point R2 1.213
Daily Pivot Point R3 1.2166

 

 

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