• USD/CAD gains some positive traction for the second straight day, though lacks follow-through.
  • The BoC’s pivot on Wednesday continues to undermine the Loonie and lends support to the pair.
  • Bets for smaller Fed rate hikes keep the USD bulls on the defensive and might cap the upside.
  • Investors might also prefer to move to the sidelines and wait for the release of the US Q4 GDP.

The USD/CAD pair attracts some buying for the second straight day on Thursday and sticks to its modest intraday gains through the early European session. Currently placed around the 1.3400 mark, the pair is now looking to build on the overnight bounce from the 1.3340 area, or a nearly two-week low.

The Canadian Dollar is undermined by the Bank of Canada's pivot on Wednesday, saying that it was time to pause the rate-hiking cycle, which, in turn, is seen lending support to the USD/CAD pair. Meanwhile, subdued action around Crude Oil prices fails to benefit the commodity-linked Loonie. That said, the underlying bearish sentiment surrounding the US Dollar could act as a headwind for the major, at least for the time being.

Firming expectations that the Federal Reserve will soften its hawkish stance keep the USD bulls on the defensive near an eight-month low. In fact, the CME's FedWatch Tool points to over a 90% probability for a smaller 25 bps rate hike at the next FOMC meeting that concludes on February 1. This will mark a further moderation in the pace of the rate-hike cycle, which is seen weighing on the US Treasury bond yields and the buck.

That said, concerns about a deeper global economic downturn help limit the downside for the safe-haven Greenback. Traders also seem reluctant from placing directional bets and prefer to wait for the release of the Advance US Q4 GDP later during the early North American session. Thursday's US economic docket also features Durable Goods Orders and New Home Sales data, which might drive the USD and provide some impetus to the USD/CAD pair.

Traders this week will also confront the release of the US Core PCE Price Index on Friday, which will play a key role in influencing the Fed's rate strategy. The key focus, however, will remain glued to the outcome of a two-day FOMC monetary policy meeting, due to be announced next Wednesday.

Technical levels to watch

USD/CAD

Overview
Today last price 1.3396
Today Daily Change 0.0011
Today Daily Change % 0.08
Today daily open 1.3385
 
Trends
Daily SMA20 1.3455
Daily SMA50 1.3504
Daily SMA100 1.352
Daily SMA200 1.3202
 
Levels
Previous Daily High 1.3428
Previous Daily Low 1.334
Previous Weekly High 1.3521
Previous Weekly Low 1.3351
Previous Monthly High 1.3705
Previous Monthly Low 1.3385
Daily Fibonacci 38.2% 1.3394
Daily Fibonacci 61.8% 1.3374
Daily Pivot Point S1 1.3341
Daily Pivot Point S2 1.3296
Daily Pivot Point S3 1.3253
Daily Pivot Point R1 1.3429
Daily Pivot Point R2 1.3472
Daily Pivot Point R3 1.3517

 

 

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.

Feed news Join Telegram

Recommended content


Recommended content

Editors’ Picks

AUD/USD extends recovery above 0.7100 despite caution stems in market mood

AUD/USD extends recovery above 0.7100 despite caution stems in market mood

The AUD/USD pair has accelerated to near 0.7115 after rebounding from below 0.7095 in the Asian session. The Aussie asset is scaling firmly higher despite the expression of caution in the market sentiment.

AUD/USD News

EUR/USD reflects market tension around 1.0870 ahead of German GDP, Fed vs. ECB battle

EUR/USD reflects market tension around 1.0870 ahead of German GDP, Fed vs. ECB battle

EUR/USD treads water around 1.0870-60 as markets remain on a dicey floor ahead of the key central bank meetings and data. Adding strength to the market’s indecision could be the return of China and fears of a softer growth number from Germany.

EUR/USD News

Gold stays defensive above $1,920 support as US Dollar steadies ahead of Fed, NFP

Gold stays defensive above $1,920 support as US Dollar steadies ahead of Fed, NFP

Gold price (XAU/USD) aptly portrays the market’s cautious mood ahead of top-tier data/events during early Monday. The metal rose in the last six weeks before losing the upside momentum at the latest.

Gold News

Why Ethereum bears need to be cautious about shorting ETH before $2,000

Why Ethereum bears need to be cautious about shorting ETH before $2,000

Ethereum price has been consolidating after the January rally subsided after three weeks. This tightening continues even after BTC shot up 3% over the weekend. Therefore, a short-term spike in buying pressure should is likely. This move could propel ETH to tag immediate hurdles, liquidating early bears.

Read more

Big risk this week Fed hikes 50 points

Big risk this week Fed hikes 50 points

While the entire global investment community is apparently very excited about the US Federal Reserve slowing its rate increases to 25 point increments, there are strong reasons for arguing why another 50 point rate hike, or two, are still on the Fed menu.

Read more

Forex MAJORS

Cryptocurrencies

Signatures