- 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
|Today last price||1.3715|
|Today Daily Change||-0.0007|
|Today Daily Change %||-0.05|
|Today daily open||1.3722|
|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|
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.
Follow us on Telegram
Stay updated of all the news
EUR/USD trims gains after reaching weekly highs at 1.0925 Premium
EUR/USD peaked at 1.0925 on Thursday, the highest level in a week, then retreated to the 1.0900 area. The pair is holding on to strong daily gains, on its way to the highest daily close since early February, supported by a weaker US Dollar ahead of Friday’s US Core PCE data.
GBP/USD eyes 1.2400 as Pound outperforms
The Pound is among the top performers of the American session. GBP/USD is trading at the highest level in almost two months, near 1.2400. Risk flows are helping the pair while at the same time making it difficult for the US Dollar to find demand.
Gold: Bulls aiming to challenge the $2,000 threshold Premium
Spot Gold found demand during American trading hours and currently trades around the $1,980 level. Following a consolidative stage, the bright metal gained upward traction on the back of continued US Dollar weakness.
Cardano might have a bumpy road following a 25% recovery
Cardano price has had a disappointing run these last two weeks when compared to other major altcoins.
FTSE100 up for 4th day in a row, hits 2-week high
We’ve seen another positive day for European markets with the FTSE100 pushing up to its highest levels in 2 weeks, although it remains well short of reversing its March losses, unlike the DAX which has reversed nearly all its post 9th March decline.