• A combination of factors prompted fresh selling around USD/CAD on Monday.
  • Rising oil prices underpinned the loonie and exerted pressure amid a weaker USD.
  • The prevalent risk-on mood dragged the safe-haven USD to a fresh monthly low.

The USD/CAD pair came under renewed selling pressure on Monday and dropped back closer to over a two-week low touched the previous session. The pair maintained its offered tone through the first half of the European session and was last seen hovering near the 1.2780-1.2785 region, down nearly 0.40% for the day.

As China prepares to ease COVID-19 lockdowns after two months, a tight global supply outlook acted as a tailwind for crude oil prices, which, in turn, underpinned the commodity-linked loonie. On the other hand, the risk-on impulse weighed on the safe-haven US dollar and exerted some downward pressure on the USD/CAD pair.

Investors turned optimistic amid hopes that loosening COVID-19 lockdowns in China could boost the global economy. This was evident from a generally positive tone around the equity markets, which drove flows away from traditional safe-haven assets and dragged the USD to a fresh monthly low on the first day of a new week.

That said, expectations would need to take more drastic action to bring inflation under control, along with an uptick in the US Treasury bond yields, should limit any further USD losses. This, in turn, warrants some caution for aggressive bearish traders ahead of the release of the latest FOMC meeting minutes on Wednesday.

Apart from this, important US macro data scheduled for release during the latter half of the week would influence the near-term USD demand and provide a fresh impetus to the USD/CAD pair. In the meantime, traders will take cues from the broader market risk sentiment and oil price dynamics for short-term opportunities amid absent economic data.

Technical levels to watch

USD/CAD

Overview
Today last price 1.2782
Today Daily Change -0.0058
Today Daily Change % -0.45
Today daily open 1.284
 
Trends
Daily SMA20 1.2872
Daily SMA50 1.2699
Daily SMA100 1.2694
Daily SMA200 1.266
 
Levels
Previous Daily High 1.2868
Previous Daily Low 1.2776
Previous Weekly High 1.2982
Previous Weekly Low 1.2776
Previous Monthly High 1.288
Previous Monthly Low 1.2403
Daily Fibonacci 38.2% 1.2833
Daily Fibonacci 61.8% 1.2811
Daily Pivot Point S1 1.2788
Daily Pivot Point S2 1.2736
Daily Pivot Point S3 1.2696
Daily Pivot Point R1 1.288
Daily Pivot Point R2 1.292
Daily Pivot Point R3 1.2971

 

 

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