#USDCAD @ 1.34392 is declining towards 1.3400 amid a sheer recovery in oil prices. (Pivot Orderbook analysis)

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• USD/CAD is declining towards 1.3400 amid a sheer recovery in oil prices.
• The risk-off impulse has faded after china announces economic stimulus to offset the Covid-inspired volatility.
• Apart from Fed Powell’s speech, the US/Canada GDP data will be keenly watched.

The pair currently trades last at 1.34392.

The previous day high was 1.3505 while the previous day low was 1.3381. The daily 38.2% Fib levels comes at 1.3458, expected to provide resistance. Similarly, the daily 61.8% fib level is at 1.3428, expected to provide support.

The USD/CAD pair is looking for an immediate cushion after a massive sell-off post failing to sustain above the critical hurdle of 1.3500. The loonie asset is hovering around 1.3433 and is expected to extend its losses towards the round-level support of 1.3400 amid a vertical rally in oil prices. Also, the recovery in the risk-appetite theme is expected to strengthen the Canadian Dollar further.

Meanwhile, the US Dollar Index (DXY) has refreshed its day’s low at 106.14 amid a decline in safe-haven’s appeal. Contrary to that, 10-year US Treasury yields have recovered to near 3.71% as investors have turned anxious ahead of the speech from Federal Reserve (Fed) chair Jerome Powell.

On the United States front, investors are awaiting the release of the quarterly Gross Domestic Product (GDP) data, which will release on Wednesday. The growth rate is expected to remain stable at 2.6%. Federal Reserve (Fed) policymakers brace for a slowdown in the growth rate as it will lead to a deceleration in inflation.

Meanwhile, loonie investors are also awaiting GDP figures, which are due on Tuesday. The annualized GDP is expected to improve to 3.5% vs. the prior release of 3.3%. While, on a quarterly basis, the economic data could decline to 0.4% against the former release of 0.8%.

On the oil front, oil prices have roared firmly on expectations of consideration of supply cuts by the OPEC cartel to offset the recent weakness. Meanwhile, public unrest in China has been calmed for a while as Chinese marshals have barricaded people at home under coercion. However, the situation has not been solved entirely.

It is worth noting that Canada is a leading oil exporter to the United States, therefore, a meaningful recovery in oil prices supports the Canadian Dollar.

Technical Levels: Supports and Resistances

USDCAD currently trading at 1.3431 at the time of writing. Pair opened at 1.3503 and is trading with a change of -0.53 % .

The pair is trading below its 20 Daily moving average @ 1.3432, below its 50 Daily moving average @ 1.3574 , above its 100 Daily moving average @ 1.3276 and above its 200 Daily moving average @ 1.3015

The previous day high was 1.3505 while the previous day low was 1.3381. The daily 38.2% Fib levels comes at 1.3458, expected to provide resistance. Similarly, the daily 61.8% fib level is at 1.3428, expected to provide support.

Note the levels of interest below:

• Pivot support is noted at 1.3421, 1.334, 1.3298
• Pivot resistance is noted at 1.3545, 1.3586, 1.3668

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