• USD/CAD gained traction for the second successive day amid a goodish pickup in the USD demand.
  • Bullish crude oil prices could underpin the loonie and keep a lid on any further gains for the major.
  • Traders now eye US Durable Goods Orders for some impetus ahead of the FOMC meeting minutes.

Following the overnight pullback from a multi-day peak, the USD/CAD pair attracted fresh buying on Wednesday and maintained its bid tone through the first half of the European session. The pair was last seen trading just below mid-1.2800s, up nearly 0.20% for the day.

The US dollar staged a solid recovery from a fresh monthly low touched the previous day, which, in turn, was seen as a key factor that pushed the USD/CAD pair higher for the second straight day. Despite signs of stability in the financial markets, the worsening global economic outlook extended some support to the safe-haven greenback.

Apart from this, the strong intraday USD move up could further be attributed to some repositioning trade ahead of the FOMC meeting minutes, due for release later during the US session. Given that a 50 bps Fed rate hike at the next two meetings is fully priced in, investors will look for clues about the possibility of a jumbo rate hike in June.

Heading into the key event risk, the US Durable Goods Orders might provide some impetus during the early North American session. In the meantime, the underlying bullish sentiment surrounding crude oil prices could lend some support to the commodity-linked loonie and act as a headwind for the USD/CAD pair, warranting caution for aggressive bulls.

Hence, it will be prudent to wait for strong follow-through buying beyond the overnight swing high, around the 1.2870-1.2875 region, before confirming that the USD/CAD pair has bottomed out. The subsequent move up could push spot prices to the 1.2900 mark, which if cleared decisively would set the stage for a further near-term appreciating move.

Technical levels to watch

USD/CAD

Overview
Today last price 1.284
Today Daily Change 0.0021
Today Daily Change % 0.16
Today daily open 1.2819
 
Trends
Daily SMA20 1.2873
Daily SMA50 1.2699
Daily SMA100 1.2695
Daily SMA200 1.2662
 
Levels
Previous Daily High 1.2873
Previous Daily Low 1.2765
Previous Weekly High 1.2982
Previous Weekly Low 1.2776
Previous Monthly High 1.288
Previous Monthly Low 1.2403
Daily Fibonacci 38.2% 1.2832
Daily Fibonacci 61.8% 1.2806
Daily Pivot Point S1 1.2765
Daily Pivot Point S2 1.2711
Daily Pivot Point S3 1.2657
Daily Pivot Point R1 1.2873
Daily Pivot Point R2 1.2926
Daily Pivot Point R3 1.298

 

 

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