- The USD/CAD is seeing a sell-off on possible profit-taking volumes.
- Resistance is being provided by a rising trendline on daily candles.
- Rising oil prices on supply constraint worries providing a floor on extended Loonie losses.
The USD/CAD pair has taken a step lower for Monday, slipping from 1.3640 into the 1.3580 level, with the Greenback (USD) on the back foot as the USD gives up some of its recent gains across the broader market.
Monday has been a light day for major market catalysts on the US Dollar side, but recent bouts of risk-off market sentiment that sent investors scurrying into the Greenback on global economy concerns could be seeing some profit-taking.
The week is far from over, however, and Wednesday will see US Consumer Price Index (CPI) data dropping on mid-week markets. Headline CPI for the month of August is forecast to come in higher at 0.5% compared to the previous read of 0.2%, representing an uptick in inflationary pressures, while the core CPI figure for the same figure is forecast to hold steady at 0.2%.
Oil prices rise as supply concerns evolve, could support CAD as trading week continues
The Loonie (CAD) has been supported by bolstered crude oil prices of late, with extended oil production cuts from both Russia and Saudi Arabia extended into the end of the year, and continued oil supply constraint concerns are building a hard floor underneath the CAD.
Despite this, the USD/CAD pairing is holding on the upside for September, still well above the month’s opening prices near 1.3510. The Dollar-Loonie rate saw a firm lift into the 1.3690 region on soured risk appetite, but action is steadily declining into a comfortable zone near 1.3580.
USD/CAD technical outlook
Further upside will be capped by firm resistance from the 1.3600 major handle, while any extensions to the downside will see a bit of a support vacuum until facing a near-term floor at 1.3500.
USD/CAD 4-hour chart
Note: All information on this page is subject to change. The use of this website constitutes acceptance of our user agreement. Please read our privacy policy and legal disclaimer. Opinions expressed at FXstreet.com are those of the individual authors and do not necessarily represent the opinion of FXstreet.com or its management. Risk Disclosure: Trading foreign exchange on margin carries a high level of risk, and may not be suitable for all investors. The high degree of leverage can work against you as well as for you. Before deciding to invest in foreign exchange you should carefully consider your investment objectives, level of experience, and risk appetite. The possibility exists that you could sustain a loss of some or all of your initial investment and therefore you should not invest money that you cannot afford to lose. You should be aware of all the risks associated with foreign exchange trading, and seek advice from an independent financial advisor if you have any doubts.
Recommended content
Editors’ Picks
AUD/USD holds below the 0.6400 mark ahead of the Australian CPI
The AUD/USD pair remains under selling pressure and drops below 0.6400 during the early Asian session on Wednesday. The pair is weighed by the negative sentiment and a decline in commodity prices. The pair trades around 0.6394, losing 0.03% on the day.
EUR/USD consolidates losses below 1.0600
EUR/USD extended its negative streak to six days, posting its lowest daily close since March 8 below 1.0600. The pair bottomed at 1.0561 and then rebounded timidly. The US Dollar remains firm, benefiting from risk aversion.
Gold challenges $1,900 after piercing September’s low
Spot Gold accelerated its slide on Tuesday, with XAU/USD plummeting to $1,900.83, its lowest in almost two weeks. The US Dollar surged on the back of a worsening market mood at the beginning of the week, as investors got spooked by central banks’ pledges to keep rates higher for longer and dismal United States (US) data.
Ethereum Restaking - The next big thing after liquid staking?
Ethereum introduced unstaking this year, and the crypto market witnessed a stark shift. The Decentralized Finance (DeFi) space, in particular, observed the emergence of liquid staking protocols. With the discourse of “restaking” picking up heat, it seems like the market is getting ready for the next big thing.
Australia Monthly CPI Preview: Inflation expected to rebound in August
The Australian Monthly Consumer Price Index (CPI) inflation data for August will be published by the Australian Bureau of Statistics (ABS) on Wednesday at 01:30 GMT. The data could be critical for the Australian Dollar (AUD) and the Reserve Bank of Australia (RBA).