#USDCAD @ 1.36251 consolidates its recent strong gains to a nearly one-month high touched on Tuesday. (Pivot Orderbook analysis)
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- USD/CAD consolidates its recent strong gains to a nearly one-month high touched on Tuesday.
- A modest recovery in Oil prices underpins the Loonie and caps the pair amid fresh USD selling.
- Rebounding US bond yields lend some support to the Greenback and help limit the downside.
The pair currently trades last at 1.36251.
The previous day high was 1.3648 while the previous day low was 1.3525. The daily 38.2% Fib levels comes at 1.3601, expected to provide support. Similarly, the daily 61.8% fib level is at 1.3572, expected to provide support.
The USD/CAD pair enters a bullish consolidation phase on Wednesday and oscillates in a narrow trading band through the first half of the European session. The pair is currently placed in neutral territory, around the 1.3620 region, just below a nearly one-month high touched the previous day.
Crude Oil prices gain some positive traction and reverses a part of Tuesday’s slide to a fresh monthly low amid reports of falling US fuel inventories, which pointed to robust demand in the world’s top consumer. This, in turn, underpins the commodity-linked Loonie and acts as a headwind for the USD/CAD pair amid the emergence of fresh US Dollar (USD) selling.
The intraday USD downtick could be attributed to the recent slump in the US Treasury bond yields amid fresh concerns about the regional banking sector. In fact, the yield on the benchmark 10-year US government bond registered its largest decline since March after the First Republic Bank reported a more than $100 billion plunge in deposits during the first quarter.
The Conference Board’s Consumer Confidence Index unexpectedly dropped to a nine-month low in April and fueled worries about a deeper economic downturn. This, in turn, lifted bets for an imminent rate cut by the Federal Reserve (Fed) later this year, which dragged longer-duration Treasury yields lower across the board and is seen weighing on the Greenback.
Apart from this, signs of stability in the equity markets turn out to be another factor weighing on the safe-haven buck and contributing to capping the upside for the USD/CAD pair, at least for the time being. The Fed, however, is still expected to deliver a 25 bps rate hike in May, which acts as a tailwind for the US bond yields and lends support to the USD.
The aforementioned fundamental backdrop favours bulls and suggests that the path of least resistance for spot prices is to the upside. Traders, however, seem reluctant and move to the sidelines ahead of this week’s key US macro releases, including the Advance Q1 GDP on Thursday and the Core PCE Price Index – the Fed’s preferred inflation gauge on Friday.
In the meantime, traders on Thursday will take cues from the release of the US Durable Goods Orders data, due later during the early North American session. The data might influence the USD and provide some impetus to the USD/CAD pair. Apart from this, Oil price dynamics might further contribute to producing short-term opportunities around the major.
Technical Levels: Supports and Resistances
USDCAD currently trading at 1.3621 at the time of writing. Pair opened at 1.3627 and is trading with a change of -0.04 % .
| Overview | Overview.1 | |
|---|---|---|
| 0 | Today last price | 1.3621 |
| 1 | Today Daily Change | -0.0006 |
| 2 | Today Daily Change % | -0.0400 |
| 3 | Today daily open | 1.3627 |
The pair remains strongly bullish on the daily timeframe. It trades above its 20 SMA @ 1.3475, 50 SMA 1.3576, 100 SMA @ 1.3528 and 200 SMA @ 1.3418.
| Trends | Trends.1 | |
|---|---|---|
| 0 | Daily SMA20 | 1.3475 |
| 1 | Daily SMA50 | 1.3576 |
| 2 | Daily SMA100 | 1.3528 |
| 3 | Daily SMA200 | 1.3418 |
The previous day high was 1.3648 while the previous day low was 1.3525. The daily 38.2% Fib levels comes at 1.3601, expected to provide support. Similarly, the daily 61.8% fib level is at 1.3572, expected to provide support.
Note the levels of interest below:
- Pivot support is noted at 1.3552, 1.3477, 1.3429
- Pivot resistance is noted at 1.3675, 1.3723, 1.3798
| Levels | Levels.1 |
|---|---|
| Previous Daily High | 1.3648 |
| Previous Daily Low | 1.3525 |
| Previous Weekly High | 1.3563 |
| Previous Weekly Low | 1.3343 |
| Previous Monthly High | 1.3862 |
| Previous Monthly Low | 1.3508 |
| Daily Fibonacci 38.2% | 1.3601 |
| Daily Fibonacci 61.8% | 1.3572 |
| Daily Pivot Point S1 | 1.3552 |
| Daily Pivot Point S2 | 1.3477 |
| Daily Pivot Point S3 | 1.3429 |
| Daily Pivot Point R1 | 1.3675 |
| Daily Pivot Point R2 | 1.3723 |
| Daily Pivot Point R3 | 1.3798 |
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