USD/CAD trades with modest gains, around 1.2570-75 region

USD/CAD edged higher on Thursday and recovered a part of the overnight heavy losses.
A softer USD held bulls from placing aggressive bets and kept a lid on any strong move up.
Subdued oil prices also did little to influence the loonie or provide any meaningful impetus.

Haresh Menghani FXStreet

The USD/CAD pair maintained its bid tone through the early European session, albeit has retreated few pips from daily tops and was last seen trading around the 1.2570-65 region.

The pair managed to regain some positive traction on Thursday and recovered a part of the previous day's heavy losses, though lacked any strong follow-through buying. A further recovery in the global risk sentiment continued acting as a headwind for the safe-haven US dollar and capped the upside for the USD/CAD pair.

Investors now seemed to have set aside worries about the potential economic fallout from the spread of the highly contagious Delta variant of the coronavirus. This was evident from a generally positive tone around the equity markets, which undermined demand for traditional safe-haven currencies, including the greenback.

On the other hand, the overnight strong rally in crude oil prices continued lending some support to the commodity-linked loonie and collaborated to keep a lid on any meaningful gains for the USD/CAD pair. The black gold remained well supported by expectations that supplies will remain tight through the end of 2021.

The optimism helped offset Wednesday's bearish report from the Energy Information Administration (EIA), which confirmed a surprise build in US crude oil supplies. That said, fresh COVID-19 outbreaks have raised concerns about the short-term fuel demand outlook and held traders from placing aggressive bullish bets around the commodity.

Market participants now look forward to the US economic docket, featuring the second-tier releases of the usual Initial Weekly Jobless Claims and Existing Home Sales data. This, along with the US bond yields, might influence the USD. Traders will further take cues from oil price dynamics to grab some short-term opportunities around the USD/CAD pair.

Technical levels to watch

USD/CAD

Overview
Today last price	1.2571
Today Daily Change	0.0016
Today Daily Change %	0.13
Today daily open	1.2555

Trends
Daily SMA20	1.2472
Daily SMA50	1.2276
Daily SMA100	1.2374
Daily SMA200	1.262

Levels
Previous Daily High	1.273
Previous Daily Low	1.2526
Previous Weekly High	1.2621
Previous Weekly Low	1.2427
Previous Monthly High	1.2487
Previous Monthly Low	1.2007
Daily Fibonacci 38.2%	1.2604
Daily Fibonacci 61.8%	1.2652
Daily Pivot Point S1	1.2477
Daily Pivot Point S2	1.2399
Daily Pivot Point S3	1.2272
Daily Pivot Point R1	1.2682
Daily Pivot Point R2	1.2808
Daily Pivot Point R3	1.2886

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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