- A combination of factors failed to assist USD/CAD to preserve its intraday gains to the 1.2730 area.
- Rallying oil prices underpinned the loonie and exerted some pressure amid a modest USD pullback.
- The downside is likely to remain cushioned amid COVID-19 woes, warranting caution for bears.
The USD/CAD pair retreated around 50-60 pips from the early European session swing highs and dropped to fresh daily lows, around the 1.2670 region in the last hour.
The pair struggled to capitalize on its modest intraday gains, instead met with some fresh supply near the 1.2730 region and was pressured by a combination of factors. A sudden pickup in crude oil prices underpinned the commodity-linked loonie. This, along with a modest US dollar pullback from over three-and-half-month tops, exerted some pressure on the USD/CAD pair.
As investors digested a surprise build in US crude oil supplies, a generally positive risk tone provided a goodish lift to the black gold. The US crude oil supply data released from the American Petroleum Institute released on Tuesday showed a build of 806K barrels during the week ended July 16 as against a 4.079-million-barrel draw recorded in the previous week.
Meanwhile, a strong follow-through positive move in the global equity markets prompted some USD profit-taking and contributed to the USD/CAD pair's slide. That said, worries about the economic impact of the fast-spreading Delta variant of the coronavirus might cap oil prices and lend some support to the safe-haven USD. This should help limit the downside for the USD/CAD pair.
The fundamental backdrop favours bullish traders and supports prospects for the emergence of some dip-buying amid absent relevant market-moving economic releases. This further makes it prudent to wait for some strong follow-through selling before confirming that the USD/CAD pair has topped out and positioning for any meaningful corrective fall.
Technical levels to watch
|Today last price||1.2674|
|Today Daily Change||-0.0007|
|Today Daily Change %||-0.06|
|Today daily open||1.2681|
|Previous Daily High||1.2787|
|Previous Daily Low||1.2675|
|Previous Weekly High||1.2621|
|Previous Weekly Low||1.2427|
|Previous Monthly High||1.2487|
|Previous Monthly Low||1.2007|
|Daily Fibonacci 38.2%||1.2718|
|Daily Fibonacci 61.8%||1.2744|
|Daily Pivot Point S1||1.2642|
|Daily Pivot Point S2||1.2602|
|Daily Pivot Point S3||1.253|
|Daily Pivot Point R1||1.2754|
|Daily Pivot Point R2||1.2826|
|Daily Pivot Point R3||1.2866|
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.