USD/CAD soars and climbs above 1.2150 for the first time since mid-May

US dollar soars across the board, as stock turn lower and yield rise.
USD/CAD about to post the best weekly gain in months.
Next week: Canadian CPI and Federal Reserve meeting.

Matías Salord FXStreet

The USD/CAD pair kept rising during the American session and jumped to 1.2163, reaching the strongest level since mid-May. Near the end of the week, it remains near the highs, with a solid bullish momentum.

The pair strengthened amid a rally of the US dollar and also boosted by technical factors after breaking above 1.2120. Higher crude oil prices (WTI up 0.65%) are not helping the loonie.

The DXY gains 0.55% as it trades at 90.55, about to test the June high, after making a rally from 90.00. Regarding yields, the US 10-year rose from 1.42% to 1.47%; it still is significantly below the level it had prior to the US inflation numbers released on Thursday.

Key data for next week

The USD/CAD is about to post the biggest weekly gain since February ahead of an important week that includes the Federal Reserve meeting. On Wednesday the Fed will announce its decision. Market participants expect no change in rates and will look for what the central bank says about the surge in inflation.

In Canada, economic reports due include Housing Starts in May, Manufacturing and Wholesale Sales for April and the most important, May’s CPI. “We expect next week’s inflation report to show the headline rate held firm at 3.4% in May—matching April’s rise. This would mark the strongest back-to-back increases in a decade, although the jump is off of an exceptionally low base set a year ago, when activity ground to a halt during the initial COVID wave,” says analysts at RBC Economics.

Technical levels

USD/CAD

Overview
Today last price	1.216
Today Daily Change	0.0064
Today Daily Change %	0.53
Today daily open	1.2096

Trends
Daily SMA20	1.2082
Daily SMA50	1.2272
Daily SMA100	1.2458
Daily SMA200	1.2739

Levels
Previous Daily High	1.2125
Previous Daily Low	1.207
Previous Weekly High	1.2133
Previous Weekly Low	1.2007
Previous Monthly High	1.2352
Previous Monthly Low	1.2013
Daily Fibonacci 38.2%	1.2091
Daily Fibonacci 61.8%	1.2104
Daily Pivot Point S1	1.2069
Daily Pivot Point S2	1.2042
Daily Pivot Point S3	1.2014
Daily Pivot Point R1	1.2124
Daily Pivot Point R2	1.2152
Daily Pivot Point R3	1.218

Author

Matías Salord

FXStreet

Matías started in financial markets in 2008, after graduating in Economics. He was trained in chart analysis and then became an educator. He also studied Journalism. He started writing analyses for specialized websites before joining FXStreet.

AUD/USD hangs close to monthly lows, still defends 0.7100 ahead of Fed decision

AUD/USD retains its negative bias for the third straight day, defending 0.7100 while trading close to a monthly low in Wednesday's Asian session on Wednesday. The US Dollar stands firm near a two-week high as the anticipated Fed rate hike and oil-driven inflation fears continue to push US bond yields to a multi-year high. Furthermore, escalating Middle East tensions benefit the safe-haven buck and weigh on the risk-sensitive Aussie.

USD/JPY holds firm above 155.00, awaits Fed policy announcements

USD/JPY climbs to a fresh one-week high above 155.00 in the Asian session on Wednesday amid a bullish US Dollar. Oil-driven inflation fears, along with the anticipated Fed rate hike, continue to support surging US bond yields. Moreover, rising US-Iran tensions underpin the USD's reserve currency status. The pair, however, remains below the mid-155.00s as bulls seem hesitant ahead of the Fed decision later today and the BoJ meeting, starting on Thursday.

Gold traders seem noncommittal below $4,350; eyes Fed rate decision

Gold clings to modest intraday gains through the first half of the European session, albeit it lacks follow-through buying and remains below $4,350. The US Dollar eases from a two-week high amid some profit-taking, offering support to the commodity. Traders, however, seem hesitant to place aggressive directional bets and opt to wait on the sidelines heading into the key central bank event risk.

Cardano's bearish breakout warns of a 15% downside risk

Cardano (ADA) hovers around $0.1900 at press time on Wednesday after a 6% decline the previous day, breaking below a crucial support level. Declining on-chain activity across the Cardano ecosystem, with reduced transaction count and Real Economic Value (REV), suggests waning user demand.

Fed decision in focus

Starting with the most important, the Fed decision. Heading into the event, data showed a rather punchy US August jobs report, which, you will likely recall, triggered a hawkish Fed rate repricing in rates markets. However, the recent US August CPI print mattered more.

How Japan became the World's Banker and why that era may be ending

Japan's ultra-low interest rates helped finance trillions of dollars in global investments for more than a decade, making the Japanese Yen one of the world’s cheapest sources of funding. With the Bank of Japan expected to tighten policy again this week, that advantage may be entering a new phase. While most major economies raised interest rates, Japan remained the world's outlier.