USDCAD struggles below 1.3300, lowest since September amid rallying oil prices and weaker USD


Share:
  • USDCAD drops to its lowest level since September 20 and is pressured by a combination of factors.
  • Rallying crude oil prices underpins the Loonie and drags the pair lower amid sustained USD selling.
  • Bets for less aggressive Fed rate hikes, sliding US bond yields, the risk-on mood weigh on the buck.

The USDCAD pair struggles to capitalize on its modest intraday uptick to levels just above the 1.3600 mark and attracts fresh selling on the last day of the week. The pair drops to its lowest level since September 20, around the 1.3284 region during the first half of the European session and is pressured by a combination of factors.

Crude oil prices rally over 3% on Friday in reaction to the news that China, the world's top oil importer, eased some of the strict COVID restrictions. This, in turn, underpins the commodity-linked Loonie and drags the USDCAD pair lower for the second successive day, also marking the fifth day of a negative move in the previous six. Apart from this, the prevalent selling bias surrounding the US Dollar (USD) is seen as another factor exerting downward pressure on the major.

In fact, the USD Index, which measures the greenback's performance against a basket of currencies, hits a two-and-half-month low amid expectations for a less aggressive policy tightening by the Fed. The softer US consumer inflation figures released on Thursday indicated that the worst of the post-pandemic price spike is over. The data reaffirms bets for smaller Fed rate hikes in coming months, which leads to a further decline in the US bond yields and weighs on the greenback.

Furthermore, the risk-on mood - as depicted by a strong rally in the equity markets - takes its toll on the safe-haven buck. That said, slightly oversold conditions on intraday charts offer some support to the USDCAD pair and help limit the downside, at least for the time being. Traders now look forward to the US economic docket, featuring the release of the Preliminary Michigan US Consumer Sentiment Index for some short-term opportunities later during the early North American session.

Technical levels to watch

USD/CAD

Overview
Today last price 1.3303
Today Daily Change -0.0022
Today Daily Change % -0.17
Today daily open 1.3325
 
Trends
Daily SMA20 1.3626
Daily SMA50 1.3523
Daily SMA100 1.3225
Daily SMA200 1.2976
 
Levels
Previous Daily High 1.3571
Previous Daily Low 1.3325
Previous Weekly High 1.3808
Previous Weekly Low 1.3469
Previous Monthly High 1.3978
Previous Monthly Low 1.3496
Daily Fibonacci 38.2% 1.3419
Daily Fibonacci 61.8% 1.3477
Daily Pivot Point S1 1.3243
Daily Pivot Point S2 1.3161
Daily Pivot Point S3 1.2997
Daily Pivot Point R1 1.3489
Daily Pivot Point R2 1.3653
Daily Pivot Point R3 1.3735

 

 

Share: Feed news

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.

Follow us on Telegram

Stay updated of all the news

Join Telegram

Recommended content


Follow us on Telegram

Stay updated of all the news

Join Telegram

Recommended content

Editors’ Picks

AUD/USD trades below 0.6900 as investors await RBA’s announcement Premium

AUD/USD trades below 0.6900 as investors await RBA’s announcement

The AUD/USD pair fell to 0.6854, recovering ahead of the US close but holding sub-0.6900. A dismal market mood and the upcoming Reserve Bank of Australia monetary policy decision are weighing on the pair.

AUD/USD News

EUR/USD stays pressured towards 50-DMA support

EUR/USD stays pressured towards 50-DMA support

EUR/USD licks its wounds at the lowest levels in a month, depressed around 1.0725 during early Tuesday in Asia. That said, the major currency pair dropped during the last consecutive three days.

EUR/USD News

Gold eyes more weakness below $1,860 as yields soar, Fed Powell’s speech eyed

Gold eyes more weakness below $1,860 as yields soar, Fed Powell’s speech eyed

Gold price is displaying a sideways auction after building a cushion around $1,860.00 in the early Asian session. The precious metal is expected to display more weakness after surrendering immediate support as US Treasury yields are gaining dramatically.

Gold News

Hedera Hashgraph: A potential bullrun with caution

Hedera Hashgraph: A potential bullrun with caution

Hedera Hashgraph price shows potential to continue its uptrend. The consolidation phase could be viewed as a buying opportunity in hindsight. However, the risk to the downside should be considered.

Read more

Reserve Bank of Australia Preview: No choice but to keep hiking rates Premium

Reserve Bank of Australia Preview: No choice but to keep hiking rates

The Reserve Bank of Australia (RBA) will announce its monetary policy decision on February 7, with the Board expected to pull the trigger by another 25 basis points (bps). The RBA has been among the first to reduce the pace of tightening, opting for 25 bps hikes in October.

Read more

Forex MAJORS

Cryptocurrencies

Signatures