USD/CAD slides to fresh session lows, around mid-1.2300s

A combination of factors prompted fresh selling around USD/CAD on Tuesday.
The risk-on mood, retreating US bond yields weighed on the safe-haven buck.
Bullish crude oil prices underpinned the loonie and contributed to the decline.

Haresh Menghani FXStreet

The intraday USD selling bias picked up pace in the last hour and dragged the USD/CAD pair back closer to mid-1.2300s during the first half of the European session.

Having faced rejection near the 1.2400 mark, the USD/CAD pair met with some fresh supply on Tuesday and for now, seems to have stalled its recent bounce from four-month lows touched last week. The downtick was sponsored by the emergence of fresh selling around the US dollar and a modest uptick in crude oil prices, which tend to underpin the commodity-linked loonie.

The dominant risk-on mood in the markets failed to assist the safe-haven USD to capitalize on the previous day's goodish rebound from one-month lows. Apart from this, a modest decline in the US Treasury bond yields undermined the greenback. That said, expectations for an early policy tightening by the Fed should limit the USD losses and lend support to the USD/CAD pair.

The Fed Chair Jerome Powell reaffirmed last Friday that the US central bank remains on track to begin tapering its bond purchases by the end of this year. Investors also seem convinced that the Fed would be forced to adopt a more aggressive policy response to contain stubbornly high inflation. This supports prospects for the emergence of some dip-buying around the USD.

Market participants now look forward to the US economic docket, featuring the releases of the Conference Board’s Confidence Index, Richmond Manufacturing Index and New Home Sales. This, along with the US bond yields and the broader market risk sentiment, will influence the USD. Traders will further take cues from oil price dynamics for some impetus around the USD/CAD pair.

Technical levels to watch

USD/CAD

Overview
Today last price	1.2354
Today Daily Change	-0.0029
Today Daily Change %	-0.23
Today daily open	1.2383

Trends
Daily SMA20	1.2493
Daily SMA50	1.2597
Daily SMA100	1.2518
Daily SMA200	1.2496

Levels
Previous Daily High	1.24
Previous Daily Low	1.2338
Previous Weekly High	1.241
Previous Weekly Low	1.2288
Previous Monthly High	1.2896
Previous Monthly Low	1.2494
Daily Fibonacci 38.2%	1.2377
Daily Fibonacci 61.8%	1.2362
Daily Pivot Point S1	1.2348
Daily Pivot Point S2	1.2312
Daily Pivot Point S3	1.2286
Daily Pivot Point R1	1.2409
Daily Pivot Point R2	1.2436
Daily Pivot Point R3	1.2471

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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