|

USD/CAD seeks support around 1.3330 amid risk-off mood, US NFP hogs limelight

  • USD/CAD has sensed demand after dropping to near 1.3330 amid negative market sentiment.
  • Goldman Sachs sees two more interest rate hikes of 25 bps by the Fed in March and May.
  • Oil price is likely to continue their downside as central banks have restricted their monetary policy further.

The USD/CAD pair has witnessed buying interest after a corrective move to near 1.3330 in the Tokyo session. The Loonie asset displayed a corrective move as the US Dollar Index (DXY) showed signs of exhaustion in the upside momentum after reaching to near 101.55.

The risk profile is extremely sour as risk-perceived assets like S&P500 futures have witnessed sheer selling pressure in the Asian session. The three-day winning streak in the S&P500 futures is expected to terminate as investors are worried that solid United States employment costs could dent the declining trend in the Consumer Price Index (CPI). This might result in a continuation of policy tightening by the Federal Reserve (Fed).

For the interest rate guidance, the Goldman Sachs Research team said in its client note that it expects the Fed to hike interest rates by 25 basis points (bps) consecutively in March and May. This way the central bank will reach the terminal rate of 5.00-5.25%. The client note claims that the Gross Domestic Growth (GDP) growth will slow to 1.4% in 2023, reflecting a negative impact from tighter financial conditions.

USD/CAD will see a power-pack action after the release of the United States Nonfarm Payrolls (NFP) data. Analysts at TD Securities expect a 220K increase in payroll and a modest increase in the Unemployment Rate to 3.6%.

On the oil front, the oil price is struggling to hold itself above the critical support of $76.00. The further downside in the oil price looks favored as western central banks have tightened their monetary policy to tame soaring inflation. It is worth noting that Canada is a leading exporter of oil to the United States and lower oil price will impact the Canadian Dollar.

USD/CAD

Overview
Today last price1.333
Today Daily Change0.0017
Today Daily Change %0.13
Today daily open1.3313
 
Trends
Daily SMA201.3383
Daily SMA501.3498
Daily SMA1001.3532
Daily SMA2001.3219
 
Levels
Previous Daily High1.3348
Previous Daily Low1.3262
Previous Weekly High1.3428
Previous Weekly Low1.33
Previous Monthly High1.3685
Previous Monthly Low1.33
Daily Fibonacci 38.2%1.3315
Daily Fibonacci 61.8%1.3295
Daily Pivot Point S11.3268
Daily Pivot Point S21.3222
Daily Pivot Point S31.3183
Daily Pivot Point R11.3353
Daily Pivot Point R21.3393
Daily Pivot Point R31.3438

Author

Sagar Dua

Sagar Dua

FXStreet

Sagar Dua is associated with the financial markets from his college days. Along with pursuing post-graduation in Commerce in 2014, he started his markets training with chart analysis.

More from Sagar Dua
Share:

Markets move fast. We move first.

Orange Juice Newsletter brings you expert driven insights - not headlines. Every day on your inbox.

By subscribing you agree to our Terms and conditions.

Editor's Picks

EUR/USD falls toward 1.1700 on broad USD recovery

EUR/USD turns south and declines toward 1.1700 on Wednesday. The US Dollar gathers recovery momentum and forces the pair to stay on the back foor, as traders look to USD short-covering ahead of US inflation report on Thursday. However, the downside could be capped by hawkish ECB expectations. 

GBP/USD trades deep in red below 1.3350 after soft UK inflation data

GBP/USD stays under strong selling pressure midweek and trades below 1.3350. The UK annual headline and core CPI rose by 3.2% each, missing estimates of 3.5% and 3.4%, respectively, reaffirming dovish BoE expectations and smashing the Pound Sterling across the board ahead of Thurday's BoE policy announcements. 

Gold clings to moderate daily gains above $4,300

Following Tuesday's volatile action, Gold regains its traction on Wednesday and trades in positive territory above $4,300. While the buildup in the USD recovery momentum caps XAU/USD's upside, the cautious market stance helps the pair hold its ground.

Bitcoin risks deeper correction as ETF outflows mount, derivative traders stay on the sidelines

Bitcoin (BTC) remains under pressure, trading below $87,000 on Wednesday, nearing a key support level. A decisive daily close below this zone could open the door to a deeper correction.

Monetary policy: Three central banks, three decisions, the same caution

While the Fed eased its monetary policy on 10 December for the third consecutive FOMC meeting, without making any guarantees about future action, the BoE, the ECB and the BoJ are holding their respective meetings this week. 

AAVE slips below $186 as bearish signals outweigh the SEC investigation closure

Aave (AAVE) price continues its decline, trading below $186 at the time of writing on Wednesday after a rejection at the key resistance zone. Derivatives positioning and momentum indicators suggest that bearish forces still dominate in the near term.