#USDCAD @ 1.34387 had extended its recovery above 1.3440 amid strength in the US Dollar. (Pivot Orderbook analysis)

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• USD/CAD had extended its recovery above 1.3440 amid strength in the US Dollar.
• The overall market mood is cautious despite the improving United States-China trade relationship.
• A continuation of a steady interest rate policy is anticipated by the BoC.

The pair currently trades last at 1.34387.

The previous day high was 1.3462 while the previous day low was 1.3418. The daily 38.2% Fib levels comes at 1.3445, expected to provide resistance. Similarly, the daily 61.8% fib level is at 1.3434, expected to provide support.

The USD/CAD pair has stretched its recovery to near 1.3440 in the early New York session. The Loonie asset rebounded firmly from near the round-level support of 1.3400 amid strength in the US Dollar Index (DXY). The USD Index has sensed marginal selling pressure after printing a fresh day high to near 104.40.

S&P500 is expected to open on a flat note considering cues from overnight performance. A volatile action is widely anticipated amid voting for a US debt-ceiling raise in Congress. The overall market mood is cautious despite the improving United States-China trade relationship. Reuters reported on Tuesday, China’s Vice Foreign Minister and a senior US State Department official had a frank, constructive, and fruitful communication on promoting Sino-US relations and properly managing differences.

A solid recovery from the USD Index has supported the US Treasury yields. The yields offered on 10-year US government bonds have climbed above 3.7%.

Going forward, the interest rate decision by the Bank of Canada (BoC) will remain in focus. BoC Governor Tiff Macklem is expected to keep interest rates steady at 4.5% as Canada’s inflationary pressures are steadily decelerating. Canada’s inflation has already slowed to 4.4% from its recent high of 8.1%. Therefore, the BoC has the luxury of keeping interest rates steady.

On the oil front, oil prices have found intermediate support near $70.00 after a vertical sell-off. More downside in the oil price seems solid as global central banks are preparing for a fresh interest rate hike cycle. It is worth noting that Canada is the leading exporter of oil to the United States and a rebound in the oil price might support the Canadian Dollar.

Technical Levels: Supports and Resistances

USDCAD currently trading at 1.345 at the time of writing. Pair opened at 1.3445 and is trading with a change of 0.04 % .

The pair remains strongly bearish on the daily time frame. It trades below the 20 SMA @ 1.3508, 50 SMA 1.3502, 100 SMA @ 1.3518 and 200 SMA @ 1.3509.

The previous day high was 1.3462 while the previous day low was 1.3418. The daily 38.2% Fib levels comes at 1.3445, expected to provide resistance. Similarly, the daily 61.8% fib level is at 1.3434, expected to provide support.

Note the levels of interest below:

• Pivot support is noted at 1.3421, 1.3397, 1.3377
• Pivot resistance is noted at 1.3465, 1.3486, 1.351

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