USDCAD has refreshed its day’s high at 1.3523 as the positive risk profile is losing its traction. (Pivot Orderbook analysis)

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• USDCAD has refreshed its day’s high at 1.3523 as the positive risk profile is losing its traction.
• Investors are cautious as the odds support a majority win of Republicans, which may trigger political instability.
• Oil prices have slipped as oil demand optimism is returning on expectations of a slowdown in Fed’s rate hike pcae.

The pair currently trades last at 1.3521.

The previous day high was 1.3553 while the previous day low was 1.3465. The daily 38.2% Fib levels comes at 1.352, expected to provide support. Similarly, the daily 61.8% fib level is at 1.3499, expected to provide support.

The USDCAD pair has comfortably established above the psychological resistance of 1.3500 in the early European session. The Greenback bulls have been supported by a decline in the risk appetite of the market participants and a steep fall in oil prices.

The risk-off is attempting to regain its traction as investors are getting anxious ahead of the US mid-term elections’ outcome. Investors are cautious as the odds support a majority win of Republicans, which may trigger political instability. The content of 435 seats of the House of Representatives and 35 seats of the Senate is expected to bring volatility in the economy.

A note from ANZ Bank states that “We regard a Republican-controlled Congress as the most likely scenario (55%). Not far behind, at 41%, is a split Congress, with a Republican-led House and a Democrat Senate.”

This week, the critical trigger for the market will be the release of the US inflation data. Projections claim that the headline inflation rate will trim to 8.0% and the core Consumer Price Index (CPI) that excludes oil and food prices from the calculation is seen marginally lower at 6.5%.

On the Loonie, the speech from Bank of Canada (BOC) Governor Tiff Macklem will remain in focus. The BOC Governor is expected to dictate the likely monetary policy action ahead. Last week’s robust payroll data is expected to support the central bank in making a hawkish decision on interest rates. Canada’s Net Change in Employment was recorded at 108.3k vs. the prior release of 21.1k.

Meanwhile, oil prices have slipped sharply as investors believe that expectations of a slowdown in the Fed’s rate hike pace are fetching optimism for oil demand ahead.

Technical Levels: Supports and Resistances

XTIUSD currently trading at 1.3521 at the time of writing. Pair opened at 1.3491 and is trading with a change of 0.22 % .

The pair is trading below its 20 Daily moving average @ 1.3679, above its 50 Daily moving average @ 1.3504 , above its 100 Daily moving average @ 1.3211 and above its 200 Daily moving average @ 1.2965

The previous day high was 1.3553 while the previous day low was 1.3465. The daily 38.2% Fib levels comes at 1.352, expected to provide support. Similarly, the daily 61.8% fib level is at 1.3499, expected to provide support.

Note the levels of interest below:

• Pivot support is noted at 1.3453, 1.3415, 1.3365
• Pivot resistance is noted at 1.3541, 1.3591, 1.3629

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