USD/CAD tumbles to 1.2920, trims weekly gains

USD/CAD breaks range and drops to test Wednesday’s low.
Wall Street indices rise sharply, extending the rebound.
Crude oil prices rise more than 3%, WTI approaches $110.00.

Matías Salord FXStreet

The USD/CAD broke under 1.2990 and quickly tumbled to 1.2923, a two-day low. It is hovering around 1.2945/50, still up for the week but significantly off highs. Still, the USD/CAD pair is on its way to the highest weekly close since November 2021.

Market sentiment boosts loonie

The US dollar dropped after the beginning of the American session amid an improvement in market sentiment. The rebound in US stocks and in crude oil helped USD/CAD break the range to the downside.

The Dow Jones is up by 1.41% while the Nasdaq gains 3.35%. Crude oil prices are up more than 3%. The WTI barrel trades at $109.38, more than $10 above Wednesday’s low.

The US Dollar Index is pulling back from multi-year highs. Earlier on Friday, it reached levels above 105.00 and at the time of writing, it trades at 104.65 down 0.10%. The DXY is falling for the first time after rising for six consecutive days.

A strong barrier at 1.2920

Technical factors contributed to the decline in USD/CAD. The break of the range gave more momentum to the loonie. The slide found support at the 1.2920 area that also contained losses on Wednesday. The 200-hour Simple Moving Average is also seen around that area. A break under 1.2920 should open the doors for a test of 1.2900. Below, the next support might be located at 1.2865/70.

The USD/CAD looks bearish in the very short term. However, a recovery above 1.3020 should change the outlook to neutral/bullish. Above this level, resistance awaits at 1.3045.

Technical levels

USD/CAD

Overview
Today last price	1.293
Today Daily Change	-0.0114
Today Daily Change %	-0.87
Today daily open	1.3044

Trends
Daily SMA20	1.2797
Daily SMA50	1.2691
Daily SMA100	1.2688
Daily SMA200	1.2651

Levels
Previous Daily High	1.3077
Previous Daily Low	1.2977
Previous Weekly High	1.2914
Previous Weekly Low	1.2713
Previous Monthly High	1.288
Previous Monthly Low	1.2403
Daily Fibonacci 38.2%	1.3039
Daily Fibonacci 61.8%	1.3015
Daily Pivot Point S1	1.2988
Daily Pivot Point S2	1.2933
Daily Pivot Point S3	1.2889
Daily Pivot Point R1	1.3088
Daily Pivot Point R2	1.3132
Daily Pivot Point R3	1.3188

Author

Matías Salord

FXStreet

Matías started in financial markets in 2008, after graduating in Economics. He was trained in chart analysis and then became an educator. He also studied Journalism. He started writing analyses for specialized websites before joining FXStreet.

EUR/USD meets initial support around 1.1800

EUR/USD remains on the back foot, although it has managed to reverse the initial strong pullback toward the 1.1800 region and regain some balance, hovering around the 1.1850 zone as the NA session draws to a close on Tuesday. Moving forward, market participants will now shift their attention to the release of the FOMC Minutes and US hard data on Wednesday.

GBP/USD bounces off lows, retargets 1.3550

After bottoming out just below the 1.3500 yardstick, GBP/USD now gathers some fresh bids and advances to the 1.3530-1.3540 band in the latter part of Tuesday’s session. Cable’s recovery comes as the Greenback surrenders part of its advance, although it keeps the bullish bias well in place for the day.

Gold hangs near one-week low; looks to FOMC Minutes for fresh impetus

Gold is consolidating just above the $4,850 level, having touched a one-week low on Tuesday, amid mixed cues. Signs of progress in US–Iran talks dent demand for the traditional safe-haven bullion. Meanwhile, rising bets for more Fed rate cuts keep the US Dollar bulls on the defensive and act as a tailwind for the non-yielding yellow metal. Traders also seem reluctant ahead of the FOMC Minutes, which would offer cues about the Fed's rate-cut path and provide some meaningful impetus.

DeFi could lift crypto market from current bear phase: Bitwise

Bitwise Chief Investment Officer Matt Hougan hinted that the decentralized finance sector could lead the crypto market out of the current bear phase, citing Aave Labs’ latest community proposal as a potential signal of good things to come.

UK jobs market weakens, bolstering rate cut hopes

In the UK, the latest jobs report made for difficult reading. Nonetheless, this represents yet another reminder for the Bank of England that they need to act swiftly given the collapse in inflation expected over the coming months.

Ripple slides to $1.45 as downside risks surge

Ripple edges lower at the time of writing on Tuesday, from the daily open of $1.48, as headwinds persist across the crypto market. A short-term support is emerging at $1.45, but a buildup of bearish positions could further weaken the derivatives market and prolong the correction.