USD/CAD spikes above mid-1.2800s, highest since Dec. 20

Haresh Menghani FXStreet

• Weaker oil prices weigh on commodity-linked Loonie.
• USD consolidates recent gains and remains supportive.
• Sliding US bond yields now seemed to cap gains.

The USD/CAD pair finally broke out of its Asian/early European session consolidation phase and refreshed session tops in the last hour.

The pair's latest leg of up-move over the past hour or so, to the highest level since December 20, lacked any fundamental trigger and was led by some renewed weakness in crude oil prices. In fact, WTI crude oil extended overnight slide and is currently placed at near two-week lows, which was eventually seen weighing on the commodity-linked currency - Loonie and driving the pair higher.

Further gains, however, remained capped amid subdued US Dollar price-action, primarily on the back of weaker US Treasury bond yields. Despite firming expectations that the Fed could opt for a faster monetary policy tightening cycle, sliding US bond yields failed to assist the greenback to build on its recent upsurge and was eventually seen keeping a lid on the pair's bullish momentum.

Focus now shifts to important US macroeconomic releases, with the key focus on ISM manufacturing PMI, which along with the Fed Chair Jerome Powell's second appearance before the Congress would be looked upon for some fresh bullish impetus.

Technical levels to watch

A follow-through buying interest could the pair towards the 1.2900 handle, above which the bullish momentum is likely to get extended beyond 1.2915-20 supply zone towards reclaiming the key 1.30 psychological mark.

On the flip side, any meaningful retracement below the 1.2830-25 region is likely to find support near the 1.2800 handle, which if broken might prompt some additional long-unwinding trade and drag the pair further towards the 1.2755 support level.

Author

Haresh Menghani

FXStreet

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

AUD/USD stuck as the RBA talks tough into a slowdown

The Australian Dollar is going nowhere in a hurry, and the contradiction at its core explains why. The Reserve Bank of Australia keeps dangling the prospect of another hike, yet the economy it governs just expanded 0.3% in the first quarter, a clear step down from the prior pace. A central bank threatening to tighten into a visible slowdown is not a recipe for conviction in either direction, and the tape shows it.

USD/JPY: Japanese Yen coiled at the line, leaning on everyone but Japan

The Yen is doing very little, and that stasis is the whole story. USD/JPY sits glued near 160.00 not because Japan has found new strength, but because two outside forces are fighting to a draw over it: a US rate complex that keeps the dollar bid, and a Ministry of Finance that refuses to let the line break.

Gold declines below $4,500 on stalled US-Iran ceasefire talks, US NFP data looms

Gold price edges lower to near $4,470 during the early Asian session on Friday. The precious metal remains volatile amid ongoing geopolitical turmoil. Traders will closely monitor the developments surrounding the US-Iran peace deal and the US May employment report later on Friday.

Bitcoin falls below $64K as demand turns negative, short-term holders' selling intensifies

Bitcoin has fallen below $64,000 on Thursday amid weakening market demand and mounting selling pressure from short-term holders. The leading cryptocurrency slipped toward the $63,000 level amid a broader risk-off environment, with several key metrics signaling one of the most challenging periods of the current market cycle.

Nonfarm payrolls: Testing the limits of Fed policy patience

The upcoming nonfarm payrolls report for May will provide the final update on the US labor market before Kevin Warsh attends his first policy meeting as the new Fed Chair later this month.

Recession on paper: What really moves the Canadian Loonie now?

Statistics Canada handed the headline writers a gift and the analysts a headache. Real GDP shrank 0.1% on an annualized basis in the first quarter, and with the fourth quarter of 2025 revised down to a 1.0% contraction, that is two negative quarters in a row, the textbook definition of a technical recession and Canada's first since the pandemic.