#USDCAD @ 1.32974 catches fresh bids on Tuesday amid a goodish pickup in the USD demand. (Pivot Orderbook analysis)

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• USD/CAD catches fresh bids on Tuesday amid a goodish pickup in the USD demand.
• Aggressive Fed rate hike bets, recession fears seem to benefit the safe-haven greenback.
• Demand concerns cap oil prices, which undermines the loonie and remains supportive.

The pair currently trades last at 1.32974.

The previous day high was 1.3344 while the previous day low was 1.3245. The daily 38.2% Fib levels comes at 1.3283, expected to provide support. Similarly, the daily 61.8% fib level is at 1.3306, expected to provide resistance.

The USD/CAD pair stalls the overnight sharp retracement slide from the highest level since November 2020 and catches fresh bids near the 1.3225 area on Tuesday. The pair builds on its steady intraday ascent through the first half of the European session and is currently placed near the daily high, just below the 1.3300 round-figure mark.

A combination of supporting factors assists the US dollar to stage a solid bounce from a one-week low touched earlier this Tuesday, which, in turn, provides a goodish lift to the USD/CAD pair. Investors seem convinced that the Fed will stick to its aggressive policy tightening path and have fully priced in at least a 75 bps rate increase at the end of a two-day policy meeting on Wednesday. This remains supportive of elevated US Treasury bond yields, which, along with a turnaround in the risk sentiment, continues to lend support to the safe-haven greenback.

The market sentiment remains fragile on the back of growing recession fears, amid headwinds stemming from China’s zero-covid policy and protracted Russia-Ukraine war. Furthermore, worries that a deeper global economic downturn could dent fuel demand keep a lid on any meaningful upside for crude oil prices. This, in turn, undermines the commodity-linked loonie, which further contributes to the USD/CAD pair’s intraday move up and supports prospects for additional gains. That said, traders might refrain from placing aggressive bets ahead of key data/event risks.

The Canadian CPI report is due for release later during the early North American session and influences the domestic currency. The US economic docket features housing market data – Building Permits and Housing Starts. This, along with the US bond yields and the broader risk sentiment, will drive the USD demand and provide some impetus to the USD/CAD pair. Apart from this, traders will take cues from oil price dynamics to grab short-term opportunities around the major.

Technical Levels: Supports and Resistances

USDCAD currently trading at 1.3295 at the time of writing. Pair opened at 1.325 and is trading with a change of 0.34 % .

The pair remains strongly bullish on the daily timeframe. It trades above its 20 SMA @ 1.31, 50 SMA 1.2978, 100 SMA @ 1.2914 and 200 SMA @ 1.2798.

The previous day high was 1.3344 while the previous day low was 1.3245. The daily 38.2% Fib levels comes at 1.3283, expected to provide support. Similarly, the daily 61.8% fib level is at 1.3306, expected to provide resistance.

Note the levels of interest below:

• Pivot support is noted at 1.3216, 1.3181, 1.3117
• Pivot resistance is noted at 1.3315, 1.3379, 1.3414

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