USD/CAD retreats modestly from multi-month highs, stays in green near 1.2900

USD/CAD reached its highest level since January at 1.2949 on Friday.
Crude oil prices trade in the negative territory.
US Dollar Index consolidates weekly gains above 93.60.

Eren Sengezer FXStreet

The USD/CAD pair extended its rally and touched its strongest level since January at 1.2949 during the European trading hours. In the early American session, the pair retreated modestly and was last seen rising 0.48% on a daily basis at 1.2891.

DXY inches lower as US stocks look to open higher

Since the beginning of the week, the heavy selling pressure surrounding crude oil prices and the unabated USD strength allowed the pair to preserve its bullish momentum. Currently, the barrel of West Texas Intermediate is down nearly 7% on a weekly basis at $62.75, losing 1.75% on the day. On the other hand, the US Dollar Index is consolidating its gains near the 9-month high it set at 93.72 earlier in the day.

The data published by Statistics Canada showed on Friday that Retail Sales rose by 4.2% on a monthly basis in June. Although this reading came in slightly weaker than the market expectation for an increase of 4.4%, it failed to trigger a noticeable market reaction.

Meanwhile, US stock index futures turned positive on the day ahead of the opening bell, suggesting that the pair could edge lower ahead of the weekend with the improving market mood keeping the USD's gains limited.

Technical levels to watch for

USD/CAD

Overview
Today last price	1.2897
Today Daily Change	0.0068
Today Daily Change %	0.53
Today daily open	1.2829

Trends
Daily SMA20	1.2557
Daily SMA50	1.2474
Daily SMA100	1.2373
Daily SMA200	1.2557

Levels
Previous Daily High	1.2831
Previous Daily Low	1.2642
Previous Weekly High	1.2589
Previous Weekly Low	1.2489
Previous Monthly High	1.2808
Previous Monthly Low	1.2303
Daily Fibonacci 38.2%	1.2759
Daily Fibonacci 61.8%	1.2714
Daily Pivot Point S1	1.2703
Daily Pivot Point S2	1.2578
Daily Pivot Point S3	1.2515
Daily Pivot Point R1	1.2892
Daily Pivot Point R2	1.2956
Daily Pivot Point R3	1.3081

Author

Eren Sengezer

FXStreet

As an economist at heart, Eren Sengezer specializes in the assessment of the short-term and long-term impacts of macroeconomic data, central bank policies and political developments on financial assets.

AUD/USD flirts with 0.7000, lowest since early August amid bullish USD

AUD/USD hits a fresh low since early August during the Asian session on Friday and looks vulnerable near 0.7000 after breaking below the 200-day SMA overnight. Against the backdrop of the hawkish Fed, a two-day rally in oil prices revives inflation fears and continues to push US bond yields to multi-year highs. Adding to this, geopolitical risks lift the US Dollar to a two-month high, overshadowing RBA rate hike bets and weighing on the pair.

USD/JPY pulls back from three-week high after failing near 159.00

USD/JPY edges lower during the Asian session on Friday, stalling its recent strong move to a three-week high of 159.00 as Japanese Yen bears turn cautious amid intervention fears. Meanwhile, the US Dollar retains a strong bullish undertone as the Fed's hawkish outlook and oil-driven inflation fears continue to push US bond yields to multi-year peaks. Furthermore, the BoJ's dovish rate hike last week might cap JPY and support spot prices.

Gold treads water below $4,300

Gold grabs some buying attention and advances marginally at the end of the week, partially retracing the weekly decline, although it is still navigating below the key $4,300 mark per troy ounce. The fresh selling bias on the Greenback and the modest decline in US Treasury yields appear to support the humble advance in the precious metal.

Week ahead: Rate hike bets face a crucial data week

Despite the solid drop from the mid-September high, oil prices remained in the driver’s seat for another week, setting the tone in financial markets. Six months have passed since the late-February start of the US-Iran conflict, and there is still no breakthrough in the stalled talks, despite pressure from regional leaders and the rest of the world.

CFTC Report: Defensive currency positioning takes hold

The week in one sentence: Sterling and Euro shorts deepened in the week to September 22, while Yen longs were cut sharply. Oil positioning improved despite a steep price decline, and Gold exposure remained crowded. The main signal was a more defensive currency positioning backdrop.

Fed vs BoJ: Both hiked. The market only believes one of them – and the chart shows which

The Fed and the BoJ have just done something remarkably similar. Both central banks raised interest rates by 25 bps last week, both are confronting inflation risks, and both signal that future decisions will depend on incoming economic data.