USD/CAD seesaws around mid-1.3700s as oil pokes key resistance, focus on US CPI, FOMC Minutes


  • USD/CAD licks its wounds after snapping three-week uptrend.
  • Oil buyers take a breather at six-week high as firmer DXY probe commodity buyers.
  • Canada employment numbers also came in positive but hawkish Fed bets, strong US NFP propelled USD.
  • IMF, World Bank meetings, geopolitical tension could keep oil buyers hopeful but US dollar strength might stop USD/CAD bears.

USD/CAD picks up bids to refresh intraday high around 1.3750 during the early Asian session on Monday. The Loonie pair’s latest gains could be linked to a pullback in oil prices, Canada’s main export item, as well as the hawkish expectations from the US Federal Reserve (Fed).

WTI crude oil posted the biggest weekly gains since February after the Organization of the Petroleum Exporting Countries and allies including Russia, known collectively as OPEC+, agreed to lower oil output by 2 million barrels per day. Also favoring the black gold could be the recent escalation in the Russia-Ukraine tussles after an explosion destroyed a part of the bridge in Crimea which is crucial for Russia's war supplies. However, the oil benchmark eased from the six-week high on Friday while consolidating recent gains amid the firmer US dollar, taking rounds to $91.50 by the press time.

That said, the US Dollar Index (DXY) rose during the last three days while reversing the previous weekly pullback from the 20-year high as markets priced in the 75 basis points (bps) of rate hike from the Fed. Behind the hawkish Fed bets could be the firmer US jobs report and upbeat comments from the policymakers that suggest further rate increases before the pause.

The US Dollar Index (DXY) cheered Friday’s jobs report for September as the headline Nonfarm Payrolls (NFP) rose to 265K versus 250K expected. Also adding strength to the greenback gauge was an unexpected fall in the Unemployment Rate to 3.5% compared to forecasts suggesting no change in the 3.7% prior.

On the other hand, Canada’s Net Change in Employment rose to 21.1K in September from -39.7K prior, versus the 20K expected. Further, the Unemployment Rate surprised markets with 5.2% figure compared to 5.4% market consensus and prior.

Against this backdrop, the US Treasury yields regain upside momentum whereas the equities witnessed the red. It should be noted that the S&P 500 Futures print mild losses by the press time.

Moving on, a holiday in the US and Canada may restrict intraday moves of the USD/CAD pair. However, the broad strength of the US dollar and the market’s risk-off mood may keep the buyers hopeful ahead of Wednesday’s Federal Open Market Committee (FOMC) Minutes and Thursday’s US Consumer Price Index (CPI).

Technical analysis

Unless breaking a one-month-old ascending trend line, at 1.3645 by the press time, the USD/CAD bears may not take the risk of entry.

Additional important levels

Overview
Today last price 1.3749
Today Daily Change 0.0008
Today Daily Change % 0.06%
Today daily open 1.3741
 
Trends
Daily SMA20 1.349
Daily SMA50 1.3177
Daily SMA100 1.3016
Daily SMA200 1.2855
 
Levels
Previous Daily High 1.3761
Previous Daily Low 1.3676
Previous Weekly High 1.3827
Previous Weekly Low 1.3503
Previous Monthly High 1.3838
Previous Monthly Low 1.2954
Daily Fibonacci 38.2% 1.3708
Daily Fibonacci 61.8% 1.3728
Daily Pivot Point S1 1.3691
Daily Pivot Point S2 1.3641
Daily Pivot Point S3 1.3606
Daily Pivot Point R1 1.3776
Daily Pivot Point R2 1.3811
Daily Pivot Point R3 1.3861

 

 

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