USD/CAD slips below 1.2500 mark, fresh monthly lows


  • A combination of factors weighed on USD/CAD for the third straight session on Thursday.
  • The USD languished near three-week lows amid reduced bets for an earlier Fed rate hike.
  • Bullish oil prices underpinned the loonie and further collaborated the intraday selling bias.

The USD/CAD pair refreshed monthly lows through the early European session, with bears now looking to extend the downward trajectory further below the key 1.2500 psychological mark.

The pair edged lower for the third consecutive session on Thursday and now seems all set to prolong this week's rejection slide from the 1.2625-30 supply zone. The downtick was sponsored by a combination of factors – the prevalent US dollar selling bias and a bullish tone surrounding crude oil prices.

The USD languished near three-week lows amid reduced bets for an early Fed rate hike. Tuesday's US CPI report reinforced the Fed's view that higher inflation will be transitory. This, along with repeated assurances from Fed officials that rates will stay low, kept the USD bulls on the defensive.

Apart from this, the recent pullback in the US Treasury bond yields from a 14-month peak of 1.776% touched in March further undermined the greenback. The underlying bullish sentiment in the markets also did little to provide any respite to the safe-haven USD or lend any support to the USD/CAD pair.

On the other hand, the commodity-linked loonie benefitted from the overnight surge in crude oil prices. In fact, WTI futures rallied nearly 5% on Wednesday after the IEA raised its annual demand forecast for 2021 and the EIA report showed a draw of 5.889 million barrels in US crude supplies.

Despite the negative factors, the USD/CAD pair, so far, has managed to defend the 1.2500 mark. The mentioned level marks the lower boundary of a near one-month-old trading range. A convincing breakthrough will be seen as a fresh trigger for bearish traders and prompt some technical selling.

Market participants now look forward to the releases of monthly Retail Sales figures, Philly Fed Manufacturing Index and Initial Weekly Jobless Claims from the US. Apart from this, the US bond yields and the broader market risk sentiment, will influence the USD and provide a fresh trading impetus.

Technical levels to watch

USD/CAD

Overview
Today last price 1.2506
Today Daily Change -0.0014
Today Daily Change % -0.11
Today daily open 1.252
 
Trends
Daily SMA20 1.2559
Daily SMA50 1.2604
Daily SMA100 1.2694
Daily SMA200 1.2967
 
Levels
Previous Daily High 1.2576
Previous Daily Low 1.25
Previous Weekly High 1.2635
Previous Weekly Low 1.2502
Previous Monthly High 1.274
Previous Monthly Low 1.2365
Daily Fibonacci 38.2% 1.2529
Daily Fibonacci 61.8% 1.2547
Daily Pivot Point S1 1.2488
Daily Pivot Point S2 1.2456
Daily Pivot Point S3 1.2412
Daily Pivot Point R1 1.2564
Daily Pivot Point R2 1.2608
Daily Pivot Point R3 1.264

 

 

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