USD/CAD struggles near its lowest level since November, below mid-1.3300s

USD/CAD drops to its lowest level since November and is pressured by a combination of factors.
Bullish Oil prices underpin the Loonie and act as a headwind amid the prevalent USD selling bias.
The fundamental backdrop favours bearish traders and supports prospects for additional losses.

Haresh Menghani FXStreet

The USD/CAD pair attracts fresh sellers in the vicinity of the 1.3400 mark on Friday and drops to its lowest level since November 25 during the first half of the European session. The pair is currently placed just below mid-1.3300s, down around 0.15% for the day, and is pressured by a combination of factors.

Crude Oil prices trade with modest gains near a one-and-half-week high amid hopes that China's pivot away from its zero-COVID policy will boost fuel demand. This, in turn, is seen underpinning the commodity-linked Loonie, which, along with the prevalent US Dollar selling bias, drags the USD/CAD pair lower for the second straight day.

The USD Index, which measures the greenback's performance against a basket of currencies, languishes near a seven-month low amid expectations that the Fed will soften its hawkish tone. The bets for smaller Fed rate hikes were lifted by the US consumer inflation figures and comments by several FOMC officials on Thursday.

In fact, the markets now seem convinced that the Fed will further slow the pace of its rate-hiking cycle and deliver a smaller 25 bps lift-off in February. This, in turn, keeps the US Treasury bond yields depressed near a multi-week low, which, along with a positive risk tone, continues to weigh on the safe-haven Greenback.

Traders now look to the US economic docket, featuring the release of the Preliminary Michigan Consumer Sentiment Index later during the early North American session. This, along with Oil price dynamics, could provide some impetus to the USD/CAD pair. Nevertheless, spot prices remain on track to end in the red for the fourth straight week.

Technical levels to watch

USD/CAD

Overview
Today last price	1.3338
Today Daily Change	-0.0024
Today Daily Change %	-0.18
Today daily open	1.3362

Trends
Daily SMA20	1.3549
Daily SMA50	1.35
Daily SMA100	1.3493
Daily SMA200	1.3165

Levels
Previous Daily High	1.3461
Previous Daily Low	1.3345
Previous Weekly High	1.3685
Previous Weekly Low	1.3433
Previous Monthly High	1.3705
Previous Monthly Low	1.3385
Daily Fibonacci 38.2%	1.339
Daily Fibonacci 61.8%	1.3417
Daily Pivot Point S1	1.3318
Daily Pivot Point S2	1.3274
Daily Pivot Point S3	1.3202
Daily Pivot Point R1	1.3434
Daily Pivot Point R2	1.3506
Daily Pivot Point R3	1.355

Author

Haresh Menghani

FXStreet

Haresh Menghani is a detail-oriented professional with 10+ years of extensive experience in analysing the global financial markets.

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