USD/CAD sticks to gains near one-week high, around 1.3470-75 area amid tumbling Oil prices

  • USD/CAD consolidates its recent strong recovery gains to over a one-week high.
  • Tumbling Crude Oil prices undermines the Loonie and lends support to the pair.
  • A modest USD downtick caps the upside, though the setup favours bullish traders.

The USD/CAD pair now seems to have entered a bullish consolidation phase and is seen oscillating in a narrow range around the 1.3470-1.3475 region, or over a one-week high touched this Wednesday.

Crude Oil prices tumble to a fresh monthly low amid worries that rising borrowing costs will slow economic growth and dent fuel demand. Apart from this, signs of cooling consumer inflation in Canada undermine the commodity-linked Lonie and assist the USD/CAD pair to build on the recent solid rebound from the 1.3300 mark, or a two-month low touched earlier this week. The upside, however, remains capped in the wake of a mildly softer tone surrounding the US Dollar, led by a modest downtick in the US Treasury bond yields.

That said, the prospects for further policy tightening by the Federal Reserve (Fed) should act as a tailwind for the US bond yields and limit the downside for the USD, at least for the time being. The markets now seem convinced that the US central bank will lift rates by 25 bps at the next policy meeting in May and have been pricing in a small chance of another rate hike in June. The bets were reaffirmed by the recent hawkish comments by several Fed officials and a rise in short-term inflation expectations, which, in turn, favours the USD bulls.

In fact, the Fed’s Beige Book released on Wednesday showed that US inflation continued to run relatively high. Furthermore, the incoming US macro data pointed to a resilient economy and fueled concerns that the Fed may have more work to do amid easing fears of a full-blown banking crisis. Apart from this, a generally weaker tone around the equity markets is seen as another factor benefitting the Greenback's relative safe-haven assets, reaffirming the positive outlook and suggesting that the path of least resistance for the USD/CAD pair is to the upside.

Market participants now look to the US economic docket, featuring the release of the usual Weekly Initial Jobless Claim, the Philly Fed Manufacturing Index and Existing Home Sales data later during the early North American session. This, along with speeches by influential FOMC members, the US bond yields and the broader risk sentiment, will drive the USD demand and provide some impetus to the USD/CAD pair. Traders will further take cues from Oil price dynamics and the Bank of Canada (BoC) Governor Tiff Macklem's scheduled speech.

Technical levels to watch


Today last price 1.3473
Today Daily Change 0.0012
Today Daily Change % 0.09
Today daily open 1.3461
Daily SMA20 1.3502
Daily SMA50 1.3562
Daily SMA100 1.3528
Daily SMA200 1.3407
Previous Daily High 1.3467
Previous Daily Low 1.338
Previous Weekly High 1.3554
Previous Weekly Low 1.3301
Previous Monthly High 1.3862
Previous Monthly Low 1.3508
Daily Fibonacci 38.2% 1.3434
Daily Fibonacci 61.8% 1.3413
Daily Pivot Point S1 1.3405
Daily Pivot Point S2 1.3349
Daily Pivot Point S3 1.3317
Daily Pivot Point R1 1.3492
Daily Pivot Point R2 1.3523
Daily Pivot Point R3 1.358



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 flirts with 1.0700 post-US PMIs

EUR/USD flirts with 1.0700 post-US PMIs

EUR/USD maintains its daily gains and climbs to fresh highs near the 1.0700 mark against the backdrop of the resumption of the selling pressure in the Greenback, in the wake of weaker-than-expected flash US PMIs for the month of April.


GBP/USD surpasses 1.2400 on further Dollar selling

GBP/USD surpasses 1.2400 on further Dollar selling

Persistent bearish tone in the US Dollar lends support to the broad risk complex and bolsters the recovery in GBP/USD, which manages well to rise to fresh highs north of 1.2400 the figure post-US PMIs.


Gold trims losses on disappointing US PMIs

Gold trims losses on disappointing US PMIs

Gold (XAU/USD) reclaims part of the ground lost and pares initial losses on the back of further weakness in the Greenback following disheartening US PMIs prints.

Gold News

Here’s why Ondo price hit new ATH amid bearish market outlook Premium

Here’s why Ondo price hit new ATH amid bearish market outlook

Ondo price shows no signs of slowing down after setting up an all-time high (ATH) at $1.05 on March 31. This development is likely to be followed by a correction and ATH but not necessarily in that order.

Read more

Germany’s economic come back

Germany’s economic come back

Germany is the sick man of Europe no more. Thanks to its service sector, it now appears that it will exit recession, and the economic future could be bright. The PMI data for April surprised on the upside for Germany, led by the service sector.

Read more