#USDCAD @ 1.33429 USDCAD is aiming to shift its business above 1.3350 despite a recovery in risk-on profile. (Pivot Orderbook analysis)

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• USDCAD is aiming to shift its business above 1.3350 despite a recovery in risk-on profile.
• Long-term US yields are prone to more downside as Fed’s George sees slowdown in Fed’s rate hike pace from CY2022.
• Oil prices are falling amid accelerating Covid-19 cases in China and no signs of further sanctions on Russia.

The pair currently trades last at 1.33429.

The previous day high was 1.3347 while the previous day low was 1.3228. The daily 38.2% Fib levels comes at 1.3302, expected to provide support. Similarly, the daily 61.8% fib level is at 1.3274, expected to provide support.

The USDCAD pair is displaying a volatility contraction in a range of 1.3314-1.3345 in Asia after a vertical rally from key support around 1.3230. The asset is hovering around its weekly high and is looking to add more gains as oil prices have faced immense pressure. Contrary to the bullish bets on USDCAD, positive market sentiment is regaining traction.

S&P500 futures are recovering after registering losses on Wednesday. The 500-stock basket witnessed a sell-off as FMCG-to-retail chain operator Target Corporation (NYSE:TGT) projected a bleak outlook on consumer spending. The US dollar index (DXY) is displaying a subdue performance after a mild recovery from 106.20. Russia-Poland noise-led rally in the DXY could get concluded as clouds of uncertainty have faded.

Meanwhile, the 10-year US Treasury yields have rebounded marginally to near 3.71% after dropping below 3.7% earlier. The pullback move seems less confident as the odds for a fifth consecutive 75 basis points (bps) rate hike by the Federal Reserve (Fed) are extremely poor. As per the CME FedWatch tool, the odds signaling a 75 bps rate hike stands at 17%.

The commentary from Kansas City Fed President Esther George has delighted the need for recession to tame inflationary pressures. In an interview with the Wall Street Journal, Fed policymaker argued that bringing inflation down without causing a recession might not be feasible. He further advocated for a slowdown in the pace of rate hike increases from CY2022.

On the Loonie front, declining oil prices have brought volatility for the Canadian dollar. Easing Covid-19 curbs in China have failed to support oil prices as infected cases are skyrocketing. Also, clarity over the Russia-Poland noise has trimmed the chances of immediate sanctions on Russia by the trading bloc.

Technical Levels: Supports and Resistances

USDCAD currently trading at 1.334 at the time of writing. Pair opened at 1.3327 and is trading with a change of 0.1 % .

The pair is trading below its 20 Daily moving average @ 1.353, below its 50 Daily moving average @ 1.3535 , above its 100 Daily moving average @ 1.3241 and above its 200 Daily moving average @ 1.2988

The previous day high was 1.3347 while the previous day low was 1.3228. The daily 38.2% Fib levels comes at 1.3302, expected to provide support. Similarly, the daily 61.8% fib level is at 1.3274, expected to provide support.

Note the levels of interest below:

• Pivot support is noted at 1.3254, 1.3182, 1.3135
• Pivot resistance is noted at 1.3373, 1.342, 1.3492

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