USD/CAD tracks oil moves near 1.2650 after the biggest losses in a month


  • USD/CAD bears take a breather around weekly low after a three-day downtrend.
  • Oil needs an extra boost to refresh two-month top, marked amid risk-on mood.
  • Firmer-than-expected Canadian data contrasts softer US PMIs to favor pair sellers.
  • Risk catalysts, US housing data may offer fresh impulse.

USD/CAD holds lower ground near the two-week low surrounding 1.2650 during the early Friday morning in Asia. In doing so, the Loonie pair pauses after declining for three days at a stretch, not to forget after posting the heaviest daily fall since late August.

Alike other major currencies, USD/CAD also cheered the market’s risk-on mood, actually got a double boost due to the oil prices rally to refresh two-month high. The upbeat sentiment dragged the US Dollar Index (DXY) the most since August 27, adding more losses than the post-Fed upside to refresh the monthly top.

While tracing the roots, fading fears that China’s struggled real-estate firm Evergrande is a serious threat to the economy play a key role. The firm got restructuring plans and showed readiness to pay a scheduled coupon while also gained government support to lift the sentiment.

In addition to weighing on the DXY, the brighter mood also favored the US equities while the US 10-year Treasury yields jumped the most in 10 weeks, finally justifying the Fed’s hints of tapering and rate hikes.

Elsewhere, the preliminary readings of the US Markit PMIs for September softened than expected but Canadian Retail Sales for July improved versus -1.2% forecast to -0.6% MoM, versus +4.2% prior readouts.

Although a lighter calendar and a lack of major events may challenge the USD/CAD upside, the pair bears may keep the reins amid risk-on mood and firmer prices of Canada’s biggest export, WTI crude oil. To filter the moves, US New Home Sales for August, expected 0.7M versus 0.708M prior, may offer extra clues while risk catalysts like a global push towards vaccinations and headlines from China keep the driver’s seat.

Technical analysis

A clear downside break of a three-week-old support line, now resistance around 1.2700, directs USD/CAD bears towards 50-DMA, close to 1.2620.

Additional important levels

Overview
Today last price 1.2656
Today Daily Change -0.0117
Today Daily Change % -0.92%
Today daily open 1.2773
 
Trends
Daily SMA20 1.2665
Daily SMA50 1.2617
Daily SMA100 1.2421
Daily SMA200 1.2525
 
Levels
Previous Daily High 1.2826
Previous Daily Low 1.2698
Previous Weekly High 1.2774
Previous Weekly Low 1.2601
Previous Monthly High 1.2949
Previous Monthly Low 1.2453
Daily Fibonacci 38.2% 1.2747
Daily Fibonacci 61.8% 1.2777
Daily Pivot Point S1 1.2705
Daily Pivot Point S2 1.2638
Daily Pivot Point S3 1.2577
Daily Pivot Point R1 1.2834
Daily Pivot Point R2 1.2894
Daily Pivot Point R3 1.2962

 

 

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