USD/CAD snaps two-day uptrend near 1.3700 as Oil grinds higher, US dollar drops on Fed’s dovish hike


  • USD/CAD takes offers to refresh intraday low during the first loss-making day in three.
  • US Dollar fails to cheer Fed’s 0.25% rate hike as policy pivot talks gained attention.
  • WTI ignores downbeat EIA Crude Oil Stocks Change amid hopes of more energy demand, cheers softer USD.
  • Second-tier US, Canada statistics can entertain traders ahead of Friday’s key data.

USD/CAD bears return to the table, after a two-day absence, as broad US Dollar weakness joins the Oil price run-up during early Thursday. With this, the Loonie pair renews its intraday low near 1.3700 during the sluggish Asian session.

That said, the US Dollar Index (DXY) drops for the sixth consecutive day as bears poke the 102.30 mark while staying around the lowest levels since early February, marked the previous day. In doing so, the greenback’s gauge versus six major currencies fails to cheer the Federal Reserve’s (Fed) 25 basis points (bps) rate hike amid dovish concerns surrounding the US central bank’s next move, as well as fears surrounding the US banking sector.

Fed matched the market’s expectations of announcing a 0.25% rate hike but the statements saying, “some additional policy firming may be appropriate,” instead of previous remarks like “ongoing increases in the target range will be appropriate” pushed back the policy hawks.

It should be noted that Fed Chair Jerome Powell and US Treasury Secretary Janet Yellen’s comments were more important as Fed’s Powell said that officials do not see rate cuts for this year, which in turn allowed breathing space to the greenback bears in the last. On the other hand, US Treasury Secretary Janet Yellen ruled out considering “blanket insurance” for bank deposits. Recently, Bloomberg also came out with the news suggesting that the Federal Deposit Insurance Corporation is said to delay the bid deadline for a Silicon Valley private bank.

Elsewhere, WTI crude oil rises for the fourth consecutive day while extending the early-week rebound from the lowest levels since December 2021, up 0.52% intraday near $70.30 by the press time. In doing so, the black gold cheers hopes of more energy demand, driven by optimism surrounding China, while ignoring a surprise build in weekly inventories. That said, the weekly Crude Oil inventory data from the US Energy Information Administration (EIA) signaled that the stockpile grew 1.117M versus expected prints of -1.448M and 1.55M prior.

Against this backdrop, the US 10-year and two-year Treasury bond yields stay pressured around 3.48% and 3.96% at the latest while the S&P 500 Futures print mild gains even after Wall Street’s downbeat performance.

Looking ahead, second-tier numbers from the US and Canada can entertain USD/CAD pair traders ahead of Friday’s key Canadian Retail Sales and the US Durable Goods Orders for January and February respectively.

Technical analysis

USD/CAD stays on the bear’s radar unless providing a daily close beyond the 1.3720-30 resistance confluence, comprising the 10-DMA and a two-week-old descending trend line.

Additional important levels

Overview
Today last price 1.3706
Today Daily Change -0.0026
Today Daily Change % -0.19%
Today daily open 1.3732
 
Trends
Daily SMA20 1.3686
Daily SMA50 1.3515
Daily SMA100 1.3511
Daily SMA200 1.3352
 
Levels
Previous Daily High 1.3745
Previous Daily Low 1.3657
Previous Weekly High 1.3828
Previous Weekly Low 1.3652
Previous Monthly High 1.3666
Previous Monthly Low 1.3262
Daily Fibonacci 38.2% 1.3711
Daily Fibonacci 61.8% 1.369
Daily Pivot Point S1 1.3678
Daily Pivot Point S2 1.3623
Daily Pivot Point S3 1.359
Daily Pivot Point R1 1.3765
Daily Pivot Point R2 1.3799
Daily Pivot Point R3 1.3853

 

 

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