USDCAD catches some bids on Wednesday and is supported by a combination of factors. (Pivot Orderbook analysis)

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• USDCAD catches some bids on Wednesday and is supported by a combination of factors.
• Retreating oil prices undermines the Loonie and acts as a tailwind amid fresh USD buying.
• The recent breakdown below the 50-day SMA warrants some caution for bullish traders.

The pair currently trades last at 1.3456.

The previous day high was 1.3527 while the previous day low was 1.3387. The daily 38.2% Fib levels comes at 1.3441, expected to provide support. Similarly, the daily 61.8% fib level is at 1.3474, expected to provide resistance.

The USDCAD pair attracts some buying on Wednesday and builds on the previous day’s late rebound from its lowest level since September 21. The pair sticks to its gains above mid-1.3400s through the first half of the European session and is supported by a combination of factors.

Crude oil prices add to the overnight heavy losses and edge lower for the second straight day, which, in turn, is seen undermining the commodity-linked Loonie. Investors remain concerned that China’s zero-COVID policy could dent fuel demand in the world’s top crude importer. Furthermore, the American Petroleum Institute reported on Tuesday that US inventories grew by 5.6 million barrels in the week to November 4, which continues to weigh on the black liquid. This, along with the emergence of some buying around the US Dollar, acts as a tailwind for the USDCAD pair.

Despite diminishing odds for a more aggressive policy tightening by the Fed, the markets are pricing in at least a 50 bps rate hike in December. This remains supportive of elevated US Treasury bond yields and offers some support to the greenback. Apart from this, a generally weaker tone around the equity markets assists the safe-haven buck to stall its recent downfall to a multi-week low. The upside potential for the USDCAD pair, however, seems limited amid the post-NFP breakdown below the 50-day SMA key pivotal support near the 1.3500 psychological mark.

Market participants might also refrain from placing aggressive bets and prefer to move to the sidelines ahead of the release of the US consumer inflation figures on Thursday. Hence, it will be prudent to wait for strong follow-through buying before confirming a near-term bottom and positioning for any further gains. In the absence of any major market-moving economic releases from the US, speeches by New York Fed President John Williams and Richmond Fed President Thomas Barkin might provide some impetus to the USDCAD pair later during the early North American session.

Technical Levels: Supports and Resistances

XTIUSD currently trading at 1.3456 at the time of writing. Pair opened at 1.3433 and is trading with a change of 0.17 % .

The pair is trading below its 20 Daily moving average @ 1.3661, below its 50 Daily moving average @ 1.3511 , above its 100 Daily moving average @ 1.3216 and above its 200 Daily moving average @ 1.2969

The previous day high was 1.3527 while the previous day low was 1.3387. The daily 38.2% Fib levels comes at 1.3441, expected to provide support. Similarly, the daily 61.8% fib level is at 1.3474, expected to provide resistance.

Note the levels of interest below:

• Pivot support is noted at 1.3371, 1.331, 1.3232
• Pivot resistance is noted at 1.3511, 1.3589, 1.365

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