USD/CAD slips below 1.3600 mark amid rising oil prices, modest USD weakness

A combination of factors drags USD/CAD to over a one-week low on Tuesday.
Bullish oil prices underpin the loonie and exert pressure amid a weaker USD.
Retreating US bond yields, the risk-on impulse continues to weigh on the buck.

Haresh Menghani FXStreet

The USD/CAD pair adds to the previous day's heavy losses and remains under some selling pressure for the second successive day on Tuesday. Spot prices drop to over a one-week low during the early European session, with bears now looking to extend the downward trajectory further below the 1.3600 round-figure mark.

Crude oil prices remain supported by expectations for the biggest supply cut by OPEC+ since the 2020 COVID crisis and continue to underpin the commodity-linked loonie. This, along with the prevalent US dollar selling bias, acts as a headwind for the USD/CAD pair and supports prospects for an extension of the corrective pullback from the highest level since May 2020.

The Bank of England's reaffirmation to buy up to £5 billion of long-dated gilts drags the US Treasury bond yields away from a multi-year top touched last week. Apart from this, the risk-on impulse - as depicted by a strong follow-through rally in the US equity markets - further seems to weigh on the safe-haven buck, though hawkish Fed expectations could limit losses.

Investors seem convinced that the US central bank will stick to its aggressive rate hiking cycle to tame inflation and have been pricing in another supersized 75 bps increase in November. The bets were reaffirmed by recent hawkish remarks by several Fed officials. This, in turn, favours the USD bulls and could offer some support to the USD/USD pair, at least for now.

Furthermore, market participants remain concerned that a deeper global economic downturn will dent fuel demand. This might keep a lid on any strong gains for the black liquid and further contribute to limiting the downside for the USD/CAD pair. This makes it prudent to wait for strong follow-through selling before confirming that spot prices have formed a near-term top.

Market participants now look forward to the US economic docket, featuring the release of JOLTS Job Openings and Factory Orders data later during the early North American session. This, along with speeches by FOMC members, the US bond yields and the broader risk sentiment, will drive the USD demand and provide some impetus to the USD/CAD pair. Traders will further take cues from oil price dynamics to grab short-term opportunities around the major.

Technical levels to watch

USD/CAD

Overview
Today last price	1.3604
Today Daily Change	-0.0020
Today Daily Change %	-0.15
Today daily open	1.3624

Trends
Daily SMA20	1.3378
Daily SMA50	1.3111
Daily SMA100	1.2983
Daily SMA200	1.2836

Levels
Previous Daily High	1.3827
Previous Daily Low	1.362
Previous Weekly High	1.3838
Previous Weekly Low	1.356
Previous Monthly High	1.3838
Previous Monthly Low	1.2954
Daily Fibonacci 38.2%	1.3699
Daily Fibonacci 61.8%	1.3748
Daily Pivot Point S1	1.3554
Daily Pivot Point S2	1.3484
Daily Pivot Point S3	1.3348
Daily Pivot Point R1	1.376
Daily Pivot Point R2	1.3896
Daily Pivot Point R3	1.3966

Author

Haresh Menghani

FXStreet

Haresh Menghani is a detail-oriented professional with 10+ years of extensive experience in analysing the global financial markets.

EUR/USD: Bears retain control below 1.1780-1.1770 confluence breakpoint

The EUR/USD pair remains on the back foot through the Asian session on Friday and currently trades just above mid-1.1700s, well within striking distance of a nearly one-month low set the previous day.

GBP/USD seems vulnerable near one-month low vs. USD as traders await US data

The GBP/USD pair prolongs its weekly downtrend for the fifth consecutive day on Friday and slides back closer to a nearly one-month low, touched the previous day. Spot prices trade below mid-1.3400s during the Asian session on Friday and seem vulnerable to slide further as traders now look to important US macro data for a fresh impetus.

Gold eyes next breakout on US GDP, PCE inflation data

Gold sticks to recent gains around the $5,000-mark early Friday, biding time before the high-impact US macro events. The focus is now on the US fourth-quarter Gross Domestic Product, core Personal Consumption Expenditures Price Index and the Supreme Court’s ruling on President Donald Trump’s tariffs.

Bitcoin, Ethereum and Ripple remain range-bound as breakdown risks rise

Bitcoin, Ethereum, and Ripple are trading sideways within consolidation ranges on Friday, signaling a lack of directional bias in the broader crypto market. BTC rebounded from key support, and ETH is nearing the lower consolidation boundary, while XRP is holding at its lower trendline boundary.

Hawkish Fed minutes and a market finding its footing

It was green across the board for US Stock market indexes at the close on Wednesday, with most S&P 500 names ending higher, adding 38 points (0.6%) to 6,881 overall. At the GICS sector level, energy led gains, followed by technology and consumer discretionary, while utilities and real estate posted the largest losses.

Injective token surges over 13% following the approval of the mainnet upgrade proposal

Injective price rallies over 13% on Thursday after the network confirmed the approval of its IIP-619 proposal. The green light for the mainnet upgrade has boosted traders’ sentiment, as the upgrade aims to scale Injective’s real-time Ethereum Virtual Machine architecture and enhance its capabilities to support next-generation payments.