USDCAD is eyeing more weakness towards the 1.3300 cushion as red-hot US inflation cools down. (Pivot Orderbook analysis)

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• USDCAD is eyeing more weakness towards the 1.3300 cushion as red-hot US inflation cools down.
• The risk profile has turned solid as the Fed may not continue its 75 bps rate hike cycle.
• Loonie bulls have strengthened on hawkish BOC Macklem’s commentary and a recovery in oil prices.

The pair currently trades last at 1.3332.

The previous day high was 1.3542 while the previous day low was 1.3411. The daily 38.2% Fib levels comes at 1.3492, expected to provide resistance. Similarly, the daily 61.8% fib level is at 1.3461, expected to provide resistance.

The USDCAD pair is declining towards the round-level cushion of 1.3300 in the early Asian session. The Greenback bulls have faced a massive sell-off on soft October’s inflation report released on Thursday. This sent the US Treasury yields extreme towards the south and put the positive market sentiment into the driving seat.

The 10-year US Treasury yields plummeted to 3.8% as the Fed may continue its 75 basis points (bps) rate hike spell, according to probability from the CME FedWatch tool. S&P500 witnessed a juggernaut rally as a significant decline in odds of a bigger rate hike by the Federal Reserve (Fed) in its December monetary policy trimmed sharply.

The mighty US dollar index (DXY) nose-dived to near a two-month low at around 107.68. A significant rise in bets for a 50 bps rate has trimmed the safe-haven’s appeal. Minting cool down in red-hot inflationary pressures has delighted Fed policymakers. San Francisco Fed President Mary Daly and Dallas Fed President Lorie Logan have cheered a note-worth slowdown in the price growth but still warn that fight with the inflation monster is far from over.

Cleveland Fed Bank President Loretta Mester supported the view of other Fed policymakers and believes that the restrictive policy measures should continue given the persistent nature of inflation.

Meanwhile, Loonie investors are supporting their domestic currency on hawkish commentary from Bank of Canada (BOC) Governor Tiff Macklem. BOC Governor cited that “Canadians should expect even more rate hikes to come on top of six that have already happened this year,” during an interview with CBC News in the late New York session.

He further added that layoffs will increase and the growth rate may come to zero in the next few quarters, and the central bank is fine with a mild recession as a price to bring down inflation to desired levels.

On the oil front, the price of fossil fuels rebounded after dropping to near $84.00 as softer inflationary pressures have infused optimism in oil bulls. This has also strengthened the Canadian dollar as Canada is a leading exporter of oil to the US.

It is worth noting that the US and Canadian markets are closed on Friday on account of Veterans Day and Remembrance Day respectively.

Technical Levels: Supports and Resistances

EURUSD currently trading at 1.3332 at the time of writing. Pair opened at 1.3532 and is trading with a change of -1.48 % .

The pair is trading below its 20 Daily moving average @ 1.3647, below its 50 Daily moving average @ 1.3519 , above its 100 Daily moving average @ 1.3222 and above its 200 Daily moving average @ 1.2973

The previous day high was 1.3542 while the previous day low was 1.3411. The daily 38.2% Fib levels comes at 1.3492, expected to provide resistance. Similarly, the daily 61.8% fib level is at 1.3461, expected to provide resistance.

Note the levels of interest below:

• Pivot support is noted at 1.3448, 1.3364, 1.3317
• Pivot resistance is noted at 1.3579, 1.3626, 1.371

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