USD/CAD snaps three-day fall to poke 1.2700 on sour sentiment, weak oil prices

USD/CAD takes the bids to refresh intraday top, rises the most since Monday.
Virus woes spread outside Eurozone amid fears of a new variant, light calendar, heavy yields also propel the pair.
Oil prices drop as SPR releases join fears of softer demand due to COVID-19.
No major data/events on calendar but risk catalysts are the key to follow for fresh impulse.

Anil Panchal FXStreet

USD/CAD refreshes intraday high to 1.2693 to mark the first positive day in the last four with 0.36% daily gains by the press time of early Friday. In doing so, the Loonie pair takes clues from the US dollar’s strength and the downbeat prices of Canada’s main export item, namely WTI crude oil.

In addition to a jump in the virus cases inside Eurozone, fears of a rigorous virus variant that is immune to the vaccines and spreads faster also weigh on the market sentiment, which in turn underpin the US dollar’s safe-haven demand.

While the risk-off mood weighs on the commodities and takes oil with it, plans of the SPR (Strategic Petroleum Reserves) releases from the US, China, Japan and India seem to exert additional downside pressure on the WTI crude oil prices, down 2.11% intraday around $76.40 at the latest.

Poland, Germany and France struggle to defend their “no national lockdown” concerns whereas chatters of a faster spreading virus variant add to the risk-off mood. “Germany crossed the threshold of 100,000 COVID-19-related deaths on Thursday with a surge in infections posing a challenge for the new government,” said Reuters.

The word also spreads that the recently found version of the coronavirus, with a formal name of B.1.1.529, is linked to South Africa and is immune to the vaccines. For the same, the World Health Organization (WHO) has called for a special meeting on Friday and may announce it as the variant of concern.

Amid these plays, the US 10-year Treasury yields drop six basis points (bps) to 1.583%, extending Wednesday’s pullback from the monthly peak. Additionally portraying the risk aversion are the downbeat prints of the S&P 500 Futures, -0.80% intraday, as well as the Asia-Pacific stocks.

As virus woes are in the driver’s seat, COVID-19 updates will be the key for USD/CAD prices, not to forget the US traders’ reaction to the change in risk appetite amid a light calendar.

Technical analysis

A clear upside break of the 61.8% Fibonacci retracement (Fibo.) of August-October downside, near 1.2700, becomes necessary for the USD/CAD bulls to retake controls.

Additional important levels

Overview
Today last price	1.2696
Today Daily Change	0.0048
Today Daily Change %	0.38%
Today daily open	1.2648

Trends
Daily SMA20	1.2531
Daily SMA50	1.2534
Daily SMA100	1.2563
Daily SMA200	1.2471

Levels
Previous Daily High	1.2677
Previous Daily Low	1.264
Previous Weekly High	1.2663
Previous Weekly Low	1.2493
Previous Monthly High	1.2739
Previous Monthly Low	1.2288
Daily Fibonacci 38.2%	1.2655
Daily Fibonacci 61.8%	1.2663
Daily Pivot Point S1	1.2633
Daily Pivot Point S2	1.2619
Daily Pivot Point S3	1.2597
Daily Pivot Point R1	1.267
Daily Pivot Point R2	1.2692
Daily Pivot Point R3	1.2707

Author

Anil Panchal

FXStreet

Anil Panchal has nearly 15 years of experience in tracking financial markets. With a keen interest in macroeconomics, Anil aptly tracks global news/updates and stays well-informed about the global financial moves and their implications.

EUR/USD climbs to daily highs near 1.1820

EUR/USD now picks up pace and advances to the area of daily peaks north of the 1.1800 barrier at the end of the week. The pair’s decent move higher comes against the backdrop of a generalised lack of direction in the FX galaxy and the mild offered stance in the US Dollar.

GBP/USD trims losses, retests 1.3460

After briefly challenging its key 200-day SMA near 1.3440, GBP/USD now manages to regain some balance and revisit the 1.3460 zone on Friday. Cable’s pullback comes as the selling pressure on the Greenback gathers traction, reigniting some recovery in the risk-linked space.

Gold flirts with four-week highs past $5,200

Gold extends its rebound, climbing for a third consecutive session and pushing back above the $5,200 mark per troy ounce on Friday. The move higher continues to draw support from lingering geopolitical tensions and the ongoing uncertainty surrounding US trade policy, both of which are keeping safe-haven demand firmly in play.

Bitcoin, Ethereum and Ripple consolidate with short-term cautious bullish bias

Bitcoin, Ethereum and Ripple are consolidating near key technical areas on Friday, showing mild signs of stabilization after recent volatility. BTC holds above $67,000 despite mild losses so far this week, while ETH hovers around $2,000 after a rejection near its upper consolidation boundary.

Changing the game: International implications of recent tariff developments

The Supreme Court ruling on International Emergency Economic Powers Act (IEEPA) tariffs provides limited relief for the rest of the world, with weighted average tariff rates modestly lower.

Starknet unveils strkBTC, shielded Bitcoin transactions on Ethereum Layer 2

Starknet, the Ethereum Layer 2 network developed by StarkWare, today announced strkBTC, a wrapped Bitcoin asset that introduces optional shielding while preserving full DeFi composability.