USD/CAD steadily moves back above 1.3700 mark, lacks follow-through buying


  • USD/CAD recovers early lost ground amid a modest USD recovery from the daily low.
  • Fears of a full-blown banking crisis drive some haven flows and benefit the Greenback.
  • An intraday move up in Oil prices could underpin the Loonie and cap any further gains.

The USD/CAD pair attracts some dip-buying near the 1.3680-1.3675 region on Friday and has now reversed a major part of its intraday losses. The pair climbs back above the 1.3700 round-figure mark during the mid-European session, though the intraday uptick lacks bullish conviction.

Crude Oil prices regain positive traction on the last day of the week and move away from a 15-month low touched on Thursday amid hopes for a strong recovery in Chinese fuel demand. This, in turn, is seen underpinning the commodity-linked Loonie and acting as a headwind for the USD/CAD pair amid a modest US Dollar weakness. Expectations that the Fed will adopt a less aggressive hawkish stance in the wake of worsening economic conditions weigh on the USD.

Last week's collapse of two mid-size US banks - Silicon Valley Bank and Signature Bank - forced investors to scale back bets for more aggressive policy tightening by the US central bank. In fact, the markets are now pricing in a greater chance of a smaller 25 bps lift-off at the upcoming FOMC monetary policy meeting on March 21-22. This is evident from a fresh leg down in the US Treasury bond yields and turns out to be a key factor exerting downward pressure on the buck.

That said, a generally weaker risk tone drives some haven flows towards the Greenback and assists the USD/CAD pair to reverse the early lost ground. Despite multi-billion-dollar lifelines for troubled banks in the US and Europe, investors remain worried about widespread contagion and the possibility of a full-blown global banking crisis. This, along with looming recession fears, takes its toll on the global risk sentiment and benefits traditional safe-haven currencies.

Furthermore, the fact that the Bank of Canada (BoC) became the first major central bank to pause its rate-hiking cycle last week could undermine the Canadian Dollar. This, in turn, suggests that the path of least resistance for the USD/CAD pair is to the upside and supports prospects for a move back towards reclaiming the 1.3800 mark. Traders now look to the release of the Michigan US Consumer Sentiment Index to grab short-term opportunities heading into the weekend.

Technical levels to watch

USD/CAD

Overview
Today last price 1.3715
Today Daily Change -0.0007
Today Daily Change % -0.05
Today daily open 1.3722
 
Trends
Daily SMA20 1.3645
Daily SMA50 1.3492
Daily SMA100 1.3508
Daily SMA200 1.3335
 
Levels
Previous Daily High 1.3788
Previous Daily Low 1.3714
Previous Weekly High 1.3862
Previous Weekly Low 1.3582
Previous Monthly High 1.3666
Previous Monthly Low 1.3262
Daily Fibonacci 38.2% 1.3742
Daily Fibonacci 61.8% 1.376
Daily Pivot Point S1 1.3694
Daily Pivot Point S2 1.3667
Daily Pivot Point S3 1.362
Daily Pivot Point R1 1.3769
Daily Pivot Point R2 1.3815
Daily Pivot Point R3 1.3843

 

 

Share: Feed news

Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers. The author will not be held responsible for information that is found at the end of links posted on this page.

If not otherwise explicitly mentioned in the body of the article, at the time of writing, the author has no position in any stock mentioned in this article and no business relationship with any company mentioned. The author has not received compensation for writing this article, other than from FXStreet.

FXStreet and the author do not provide personalized recommendations. The author makes no representations as to the accuracy, completeness, or suitability of this information. FXStreet and the author will not be liable for any errors, omissions or any losses, injuries or damages arising from this information and its display or use. Errors and omissions excepted.

The author and FXStreet are not registered investment advisors and nothing in this article is intended to be investment advice.

Recommended content


Recommended content

Editors’ Picks

EUR/USD slides to multi-month lows below 1.0650

EUR/USD slides to multi-month lows below 1.0650

EUR/USD stays under heavy bearish pressure and trades at its lowest level since November below 1.0650. Divergent ECB-Fed policy outlooks and the risk-averse market atmosphere keep the US Dollar strongly bid and weigh on the pair.

EUR/USD News

GBP/USD extends decline below 1.2450 on sustained USD strength

GBP/USD extends decline below 1.2450 on sustained USD strength

GBP/USD extends losses and trades at fresh multi-month lows below 1.2450 even after the January month UK GDP was revised higher to 0.3%. The negative shift seen in risk mood fuels another leg higher in the USD and drags the pair lower.

GBP/USD News

Gold advances to new historic high above $2,400

Gold advances to new historic high above $2,400

Gold gathers bullish momentum ahead of the weekend and trades at a new record high above $2,400. Escalating geopolitical tensions help XAU/USD continue to push up despite the broad-based US Dollar strength.

Gold News

Robert Kiyosaki steers clear from ETFs, opts for holding Bitcoin directly instead

Robert Kiyosaki steers clear from ETFs, opts for holding Bitcoin directly instead

Rich Dad Poor Dad author Robert Kiyosaki says he will not buy Bitcoin ETFs. Kiyosaki stated his dislike for Wall Street’s financial products and preferred packaging his own. 

Read more

Five fundamentals for the week ahead: Israel-Iran tensions, US Retail Sales, and more Premium

Five fundamentals for the week ahead: Israel-Iran tensions, US Retail Sales, and more

US Retail Sales data will provide an updated snapshot of the health of the economy. Chinese GDP may confirm the narrative that Beijing's stimulus is working. UK inflation data may push the Bank of England to early rate cuts.

Read more

Forex MAJORS

Cryptocurrencies

Signatures