USD/CAD reverses an intraday dip to 1.2100 mark, turns flat

USD/CAD witnessed a modest intraday pullback from one-week tops amid a subdued USD demand.
A softer tone around crude oil prices undermined the loonie and should help limit any further losses.
Investors now look forward to the US economic releases for some meaningful trading opportunities.

Haresh Menghani FXStreet

The USD/CAD pair dropped to the 1.2100 mark during the first half of the European session, albeit quickly recovered few pips thereafter. The pair was last seen hovering around the 1.2115-20 region, nearly unchanged for the day.

The pair struggled to capitalize on its early uptick, instead met with some fresh supply near the 1.2140 region and for now, seems to have snapped two consecutive days of the winning streak. The pullback was exclusively sponsored by a modest US dollar weakness, though a softer tone around crude oil prices undermined the commodity-linked loonie and helped limit any further losses.

The attempted USD recovery from the lowest level since January ran out of steam amid firming expectations that the Fed will retain its ultra-lose policy stance for a longer period. Bulls looked past the overnight comments from the Fed Vice Chair Randal Quarles, indicating that the FOMC is edging closer to begin a discussion about tapering if the economic data come in stronger than expected.

That said, a modest uptick in the US Treasury bond yields should help to put a tentative floor under the greenback. This, along with a modest pullback in crude oil prices, held traders from placing aggressive bearish bets around the USD/CAD pair. Oil prices edged lower amid concerns about a potential increase in Iranian supplies, which overshadowed optimism over fuel demand recovery.

This makes it prudent to wait for some strong follow-through selling before positioning for the resumption of the recent/well-established downward trajectory. Market participants now look forward to the US economic docket – featuring the releases of the Prelim (first revision) Q1 GDP, the usual Initial Weekly Jobless Claims, Durable Goods Orders and Pending Home Sales – for some impetus.

This, along with the US bond yields, will influence the USD later during the early North American session. Apart from this, Traders might further take cues from oil price dynamics. This, in turn, should allow traders to grab some short-term opportunities around the USD/CAD pair.

Technical levels to watch

USD/CAD

Overview
Today last price	1.2109
Today Daily Change	-0.0016
Today Daily Change %	-0.13
Today daily open	1.2125

Trends
Daily SMA20	1.2147
Daily SMA50	1.2378
Daily SMA100	1.2526
Daily SMA200	1.2797

Levels
Previous Daily High	1.2128
Previous Daily Low	1.2043
Previous Weekly High	1.2144
Previous Weekly Low	1.2013
Previous Monthly High	1.2654
Previous Monthly Low	1.2266
Daily Fibonacci 38.2%	1.2096
Daily Fibonacci 61.8%	1.2076
Daily Pivot Point S1	1.2069
Daily Pivot Point S2	1.2014
Daily Pivot Point S3	1.1985
Daily Pivot Point R1	1.2154
Daily Pivot Point R2	1.2183
Daily Pivot Point R3	1.2239

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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