- A modest USD pullback prompted some selling around USD/CAD on Friday.
- Hawkish Fed expectations might help limit any meaningful slide for the USD.
- Weaker oil prices could undermine the loonie and lend support to the major.
The USD/CAD pair edged lower heading into the European session and was last seen trading near daily lows, around the 1.2655-60 region.
The pair witnessed some selling during the first half of the trading action on Friday and eroded a part of the previous day's positive move amid a modest US dollar downtick. As investors digested Thursday's upbeat US economic releases, the underlying bullish sentiment in the financial markets undermined the safe-haven USD and exerted some pressure on the USD/CAD pair.
That said, expectations for an early policy tightening by the Fed should continue to act as a tailwind for the greenback and help limit any meaningful slide for the USD/CAD pair. Investors started pricing in the possibility of an imminent Fed taper announcement after the US Retail Sales data underscored consumer confidence and pointed to the continuation of economic recovery.
Apart from this, a softer tone around crude oil prices could undermine the commodity-linked loonie and lend some support to the USD/CAD pair. Even from a technical perspective, the pair has been oscillating in a range over the past one week or so. This, in turn, warrants some caution for aggressive bearish traders and before positioning for any further depreciating move.
Market participants now look forward to the release of the Prelim Michigan US Consumer Sentiment Index, due later during the early North American session. This, along with the broader market risk sentiment and 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
|Today last price||1.2662|
|Today Daily Change||-0.0019|
|Today Daily Change %||-0.15|
|Today daily open||1.2681|
|Previous Daily High||1.27|
|Previous Daily Low||1.2617|
|Previous Weekly High||1.2762|
|Previous Weekly Low||1.2518|
|Previous Monthly High||1.2949|
|Previous Monthly Low||1.2453|
|Daily Fibonacci 38.2%||1.2668|
|Daily Fibonacci 61.8%||1.2648|
|Daily Pivot Point S1||1.2632|
|Daily Pivot Point S2||1.2583|
|Daily Pivot Point S3||1.2549|
|Daily Pivot Point R1||1.2715|
|Daily Pivot Point R2||1.2749|
|Daily Pivot Point R3||1.2798|
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.