Despite a slight rebound recorded in the last 48 hours, USDCAD at 1.32217 is finding it difficult to take advantage of those gains.

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• USD/CAD struggles to capitalize on its modest recovery gains recorded over the past two days.

The pair currently trades last at 1.32217.

The previous day high was 1.327 while the previous day low was 1.3206. The daily 38.2% Fib levels comes at 1.3245, expected to provide resistance. Similarly, the daily 61.8% fib level is at 1.323, expected to provide resistance.

The USD/CAD pair extends the previous day’s late pullback from the 1.3270 area and edges lower during the Asian session on Wednesday, albeit lacks follow-through selling. Spot prices currently trade around the 1.3230-1.3225 area, down less than 0.10% for the day, and manage to hold comfortably above the YTD low touched last Friday.

A modest uptick in Crude Oil prices underpins the commodity-linked Loonie, which, in turn, is seen as a key factor acting as a headwind for the USD/CAD pair. The downside, however, remains cushioned in the wake of a mildly positive tone surrounding the US Dollar (USD), which continues to draw support from the Federal Reserve’s (Fed) hawkish outlook. It is worth recalling that the US central bank last week signalled that borrowing costs may still need to rise as much as 50 bps by the end of this year.

In fact, the markets are now pricing in another 25 bps lift-off at the July FOMC meeting and the expectations were reaffirmed by Tuesday’s upbeat US housing market data. Apart from this, the overnight slump in the US equity markets, led by worries about a global economic slowdown, benefits the safe-haven Greenback and lends support to the USD/CAD pair. The USD bulls, however, refrain from placing aggressive bets amid speculations that the Fed is nearing the end of its rate-hiking cycle.

Hence, the market focus remains glued to Fed Chair Jerome Powell’s two-day congressional testimony, starting this Wednesday. Investors will closely scrutinize Powell’s remarks for fresh clues about the Fed’s future rate-hike path. This, along with speeches by a slew of influential FOMC members, will drive the USD demand and provide some impetus to the USD/CAD pair. Traders will also look to Canadian Retail Sales data and Oil price dynamics to grab some meaningful trading opportunities.

Technical Levels: Supports and Resistances

USDCAD currently trading at 1.3224 at the time of writing. Pair opened at 1.3235 and is trading with a change of -0.08 % .

The pair remains strongly bearish on the daily time frame. It trades below the 20 SMA @ 1.3414, 50 SMA 1.3459, 100 SMA @ 1.351 and 200 SMA @ 1.352.

The previous day high was 1.327 while the previous day low was 1.3206. The daily 38.2% Fib levels comes at 1.3245, expected to provide resistance. Similarly, the daily 61.8% fib level is at 1.323, expected to provide resistance.

Note the levels of interest below:

• Pivot support is noted at 1.3204, 1.3173, 1.314
• Pivot resistance is noted at 1.3268, 1.3301, 1.3332

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