USD/CAD remains depressed below 1.2600 mark, downside seems limited


  • USD/CAD edged lower on Friday and eroded a part of the overnight gains to multi-month tops.
  • A goodish rebound in oil prices underpinned the loonie and exerted some downward pressure.
  • A subdued USD demand failed to impress bullish traders ahead of the US Retail Sales figures.

The USD/CAD pair remained on the defensive through the first half of the European session and was last seen hovering near the lower end of its daily trading range, around the 1.2570 region.

Having struggled to find acceptance above the 1.2600 mark, the USD/CAD pair edged lower on the last day of the week and eroded a part of the previous day's strong gains to near three-month tops. A subdued US dollar demand was seen as a key factor that acted as a headwind for the major. Apart from this, a goodish rebound in crude oil prices underpinned the commodity-linked loonie and exerted some pressure on the pair.

A generally positive tone around the equity markets failed to assist the safe-haven greenback to capitalize on the overnight positive move. That said, a strong pickup in the US Treasury bond yields and hawkish Fed expectations helped limit the USD downside. Despite Fed Chair Jerome Powell's dovish testimony, investors seem convinced that the US central bank will tighten its policy sooner amid rising inflationary pressure.

On the other hand, the Canadian dollar found some support from an uptick in crude oil prices. However, worsening outbreaks of COVID-19 involving the Delta variant in some countries and uncertainty over the OPEC+ deal to boost supply clouded the outlook for the black gold. This, in turn, suggests that the path of least resistance for the loonie remains to the downside and supports prospects for additional gains for the USD/CAD pair.

Market participants now look forward to the US economic docket, highlighting the release of monthly Retail Sales figures later during the early North American session. This, along with the US bond yields and the broader market risk sentiment, might influence the USD and provide some impetus to the USD/CAD pair. Apart from this, oil price dynamics will further contribute to produce some short-term trading opportunities around the USD/CAD pair.

Technical levels to watch

USD/CAD

Overview
Today last price 1.2577
Today Daily Change -0.0017
Today Daily Change % -0.13
Today daily open 1.2594
 
Trends
Daily SMA20 1.2414
Daily SMA50 1.2233
Daily SMA100 1.2375
Daily SMA200 1.263
 
Levels
Previous Daily High 1.2614
Previous Daily Low 1.2502
Previous Weekly High 1.259
Previous Weekly Low 1.2303
Previous Monthly High 1.2487
Previous Monthly Low 1.2007
Daily Fibonacci 38.2% 1.2571
Daily Fibonacci 61.8% 1.2544
Daily Pivot Point S1 1.2526
Daily Pivot Point S2 1.2458
Daily Pivot Point S3 1.2413
Daily Pivot Point R1 1.2638
Daily Pivot Point R2 1.2682
Daily Pivot Point R3 1.275

 

 

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