USD/CAD remains on the defensive below mid-1.2700s


  • Rebounding oil prices underpinned the loonie and acted as a headwind for USD/CAD.
  • A goodish pickup in the US bond yields revived the USD demand and helped limit losses.
  • The mixed fundamental backdrop warrants some caution before placing aggressive bets.

The USD/CAD pair traded with a negative bias through the first half of the European session, albeit a lack of follow-through selling and remained confined in a range below mid-1.2700s.

The pair opened with a bearish gap on the first day of a new week and eroded a part of Friday's strong gains to the 1.2800 mark, or the highest level since September 22. Crude oil prices rebounded sharply on Monday and underpinned the commodity-linked loonie. This, in turn, was seen as a key factor that acted as a headwind for the USD/CAD pair.

Meanwhile, views that Friday's slump in the global financial markets – triggered by concerns about the Omicron coronavirus variant – was overdone led to a strong recovery in the risk sentiment. The risk-on impulse led to a solid rebound in the US Treasury bond yields, which revived the US dollar demand and helped limit the downside for the USD/CAD pair.

That said, the latest COVID-19 jitters might have forced investors to reassess the prospects for an early policy tightening by the Fed. This seemed to have held back the USD bulls from placing fresh bets and failed to assist the USD/CAD pair to gain any meaningful traction. The mixed fundamental backdrop warrants caution for aggressive traders.

Monday's US economic docket features the only release of Pending Home Sales data later during the early North American session, though it might do little to provide any impetus. Hence, the focus will remain on developments surrounding the coronavirus saga, which will play a key role in driving the broader market risk sentiment and demand for the safe-haven USD.

Apart from this, the US bond yields will also influence the USD. Traders will further take cues from oil price dynamics to grab some short-term opportunities around the USD/CAD pair.

Technical levels to watch

USD/CAD

Overview
Today last price 1.2744
Today Daily Change -0.0042
Today Daily Change % -0.33
Today daily open 1.2786
 
Trends
Daily SMA20 1.2551
Daily SMA50 1.2534
Daily SMA100 1.2566
Daily SMA200 1.2472
 
Levels
Previous Daily High 1.28
Previous Daily Low 1.2647
Previous Weekly High 1.28
Previous Weekly Low 1.2628
Previous Monthly High 1.2739
Previous Monthly Low 1.2288
Daily Fibonacci 38.2% 1.2741
Daily Fibonacci 61.8% 1.2705
Daily Pivot Point S1 1.2689
Daily Pivot Point S2 1.2592
Daily Pivot Point S3 1.2537
Daily Pivot Point R1 1.2841
Daily Pivot Point R2 1.2897
Daily Pivot Point R3 1.2994

 

 

Share: Feed news

Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers. The author will not be held responsible for information that is found at the end of links posted on this page.

If not otherwise explicitly mentioned in the body of the article, at the time of writing, the author has no position in any stock mentioned in this article and no business relationship with any company mentioned. The author has not received compensation for writing this article, other than from FXStreet.

FXStreet and the author do not provide personalized recommendations. The author makes no representations as to the accuracy, completeness, or suitability of this information. FXStreet and the author will not be liable for any errors, omissions or any losses, injuries or damages arising from this information and its display or use. Errors and omissions excepted.

The author and FXStreet are not registered investment advisors and nothing in this article is intended to be investment advice.

Recommended content


Recommended content

Editors’ Picks

EUR/USD clings to daily gains above 1.0650

EUR/USD clings to daily gains above 1.0650

EUR/USD gained traction and turned positive on the day above 1.0650. The improvement seen in risk mood following the earlier flight to safety weighs on the US Dollar ahead of the weekend and helps the pair push higher.

EUR/USD News

GBP/USD recovers toward 1.2450 after UK Retail Sales data

GBP/USD recovers toward 1.2450 after UK Retail Sales data

GBP/USD reversed its direction and advanced to the 1.2450 area after touching a fresh multi-month low below 1.2400 in the Asian session. The positive shift seen in risk mood on easing fears over a deepening Iran-Israel conflict supports the pair.

GBP/USD News

Gold holds steady at around $2,380 following earlier spike

Gold holds steady at around $2,380 following earlier spike

Gold stabilized near $2,380 after spiking above $2,400 with the immediate reaction to reports of Israel striking Iran. Meanwhile, the pullback seen in the US Treasury bond yields helps XAU/USD hold its ground.

Gold News

Bitcoin Weekly Forecast: BTC post-halving rally could be partially priced in Premium

Bitcoin Weekly Forecast: BTC post-halving rally could be partially priced in

Bitcoin price shows no signs of directional bias while it holds above  $60,000. The fourth BTC halving is partially priced in, according to Deutsche Bank’s research. 

Read more

Week ahead – US GDP and BoJ decision on top of next week’s agenda

Week ahead – US GDP and BoJ decision on top of next week’s agenda

US GDP, core PCE and PMIs the next tests for the Dollar. Investors await BoJ for guidance about next rate hike. EU and UK PMIs, as well as Australian CPIs also on tap.

Read more

Forex MAJORS

Cryptocurrencies

Signatures