USD/CAD stands tall near 1.3800, highest since November as traders look to Canadian CPI

USD/CAD attracts some buyers for the third straight day and climbs to a fresh YTD peak.
Reduced Fed rate cut bets, along with geopolitical risks, benefit the USD and lend support.
An uptick in Oil prices underpins the Loonie and keeps a lid on further gains for the major.

Haresh Menghani FXStreet

The USD/CAD pair builds on last week's breakout momentum through the 1.3600-1.3610 supply zone and gains some positive traction for the fifth successive day on Tuesday. Spot prices climb to the 1.3815 region, or the highest level since November 14 during the Asian session and remain well supported by the underlying strong bullish sentiment surrounding the US Dollar (USD).

The USD Index (DXY), which tracks the Greenback against a basket of currencies, climbs to over a five-month top in the wake of expectations that the Federal Reserve (Fed) will delay cutting interest rates amid sticky inflation. Adding to this, the upbeat US Retail Sales figures released on Monday indicated that strong consumer spending could underpin inflation and force the Fed to keep interest rates higher for longer. The hawkish outlook, meanwhile, remains supportive of elevated US Treasury bond yields, which is seen acting as a tailwind for the buck.

Apart from this, a generally weaker tone around the equity markets, amid persistent geopolitical tensions, turns out to be another factor benefitting the safe-haven Greenback and lending support to the USD/CAD pair. Meanwhile, Israel's military chief said that his country would respond to Iran's weekend missile and drone attack, raising the risk of a further escalation of conflicts in the Middle East. This assists Crude Oil prices to build on the overnight bounce from a two-week low, which could underpin the commodity-linked Loonie and cap the major.

Market participants now look to the release of the Canadian consumer inflation figures, due later during the early North American session. Meanwhile, the US economic docket features the release of housing market data and Industrial Production figures. Apart from this, speeches by influential FOMC, including Fed Chair Jerome Powell, and the broader risk sentiment will drive the USD demand. This, along with Oil price dynamics, should provide some meaningful impetus to the USD/CAD pair and allow traders to grab short-term opportunities.

USD/CAD

Overview
Today last price	1.3798
Today Daily Change	0.0010
Today Daily Change %	0.07
Today daily open	1.3788

Trends
Daily SMA20	1.3594
Daily SMA50	1.3544
Daily SMA100	1.3486
Daily SMA200	1.3517

Levels
Previous Daily High	1.3794
Previous Daily Low	1.3725
Previous Weekly High	1.3787
Previous Weekly Low	1.3547
Previous Monthly High	1.3614
Previous Monthly Low	1.342
Daily Fibonacci 38.2%	1.3767
Daily Fibonacci 61.8%	1.3751
Daily Pivot Point S1	1.3744
Daily Pivot Point S2	1.3701
Daily Pivot Point S3	1.3676
Daily Pivot Point R1	1.3813
Daily Pivot Point R2	1.3837
Daily Pivot Point R3	1.3881

Author

Haresh Menghani

FXStreet

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

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