For the third consecutive day, there is a growing interest from buyers in the US dollar to Canadian dollar exchange rate at 1.32705. This is due to the support from a stronger US dollar.
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- USD/CAD attracts some buyers for the third straight day and is supported by a stronger USD.
The pair currently trades last at 1.32705.
The previous day high was 1.3276 while the previous day low was 1.3189. The daily 38.2% Fib levels comes at 1.3243, expected to provide support. Similarly, the daily 61.8% fib level is at 1.3223, expected to provide support.
The USD/CAD pair trades with a mild positive bias for the third successive day on Thursday and is currently placed around the 1.3265-1.3270 region, just below a two-week high touched the previous day.
Federal Reserve Chair Jerome Powell’s hawkish remarks on Wednesday assists the US Dollar (USD) to stand near its highest level since June 15, which, in turn, is seen as a key factor acting as a tailwind for the USD/CAD pair. Speaking at a European Central Bank (ECB) conference, Powell reiterated that two rate increases are likely this year and did not rule out the possibility of a rate hike at the next FOMC policy meeting on July 25-26. Powell also said that he does not see inflation coming down to the Fed’s 2% target until 2025.
The Canadian Dollar (CAD), on the other hand, is undermined by the softer domestic data released on Tuesday, which showed that consumer inflation fell to its slowest pace in two years. The markets, however, are still pricing in a greater chance of another 25 bps rate hike by the Bank of Canada (BoC) in July. This, along with a modest uptick in Crude Oil prices, lends support to the commodity-linked Loonie and caps gains for the USD/CAD pair, warranting caution before positioning for any further recovery from the YTD low touched on Tuesday.
Hence, any subsequent move up is more likely to confront near the 1.3300-1.3310 strong horizontal support breakpoint, above which a bout of a short-covering move could lift spot prices to the 200-day Exponential Moving Average (EMA). Traders now look to the US economic docket, featuring the release of the final Q1 GDP print, the usual Weekly Initial Jobless Claims and Pending Home Sales data later during the early North American session. This, along with Oil price dynamics, could provide some impetus to the USD/CAD pair.
The focus, however, will remain glued to the US Core PCE Price Index – the Fed’s preferred inflation gauge on Friday. This will play a key role in influencing market expectations about the US central bank’s future rate-hike path, which, in turn, will drive the USD demand and determine the next leg of a directional move for the USD/CAD pair.
Technical Levels: Supports and Resistances
USDCAD currently trading at 1.3269 at the time of writing. Pair opened at 1.3257 and is trading with a change of 0.09 % .
| Overview | Overview.1 | |
|---|---|---|
| 0 | Today last price | 1.3269 |
| 1 | Today Daily Change | 0.0012 |
| 2 | Today Daily Change % | 0.0900 |
| 3 | Today daily open | 1.3257 |
The pair remains strongly bearish on the daily time frame. It trades below the 20 SMA @ 1.3288, 50 SMA 1.3433, 100 SMA @ 1.3498 and 200 SMA @ 1.3517.
| Trends | Trends.1 | |
|---|---|---|
| 0 | Daily SMA20 | 1.3288 |
| 1 | Daily SMA50 | 1.3433 |
| 2 | Daily SMA100 | 1.3498 |
| 3 | Daily SMA200 | 1.3517 |
The previous day high was 1.3276 while the previous day low was 1.3189. The daily 38.2% Fib levels comes at 1.3243, expected to provide support. Similarly, the daily 61.8% fib level is at 1.3223, expected to provide support.
Note the levels of interest below:
- Pivot support is noted at 1.3205, 1.3154, 1.3118
- Pivot resistance is noted at 1.3292, 1.3328, 1.338
| Levels | Levels.1 |
|---|---|
| Previous Daily High | 1.3276 |
| Previous Daily Low | 1.3189 |
| Previous Weekly High | 1.3270 |
| Previous Weekly Low | 1.3139 |
| Previous Monthly High | 1.3655 |
| Previous Monthly Low | 1.3315 |
| Daily Fibonacci 38.2% | 1.3243 |
| Daily Fibonacci 61.8% | 1.3223 |
| Daily Pivot Point S1 | 1.3205 |
| Daily Pivot Point S2 | 1.3154 |
| Daily Pivot Point S3 | 1.3118 |
| Daily Pivot Point R1 | 1.3292 |
| Daily Pivot Point R2 | 1.3328 |
| Daily Pivot Point R3 | 1.3380 |
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