USD/CAD consolidates in a range below 1.3700 mark, bullish potential seems intact


  • USD/CAD lacks firm intraday direction and consolidates below the YTD top set on Thursday.
  • An uptick in Oil prices underpins the Loonie and caps the upside amid subdued USD demand.
  • Reduced Fed rate cut bets favors USD bulls and support prospects for further near-term gains.

The USD/CAD pair oscillates in a narrow trading band during the Asian session on Friday and for now, seems to have stalled the previous day's late pullback from its highest level since November 22. Spot prices currently trade just below the 1.3700 mark, nearly unchanged for the day, though this week's breakout through the 1.3600-1.3610 supply zone favors bulls and supports prospects for a further near-term appreciating move. 

Crude Oil prices edge higher amid heightened tensions in the Middle East on the back of a possible Iranian retaliation over a suspected Israeli strike on its embassy in Syria. This, in turn, is seen underpinning the commodity-linked Loonie, which, along with subdued US Dollar (USD) price action, acts as a headwind for the USD/CAD pair. That said, jitters about growing non-OPEC output, led by the US, might cap gains for the black liquid. Apart from this, expectations that the Federal Reserve (Fed) may delay cutting interest rates favor the USD bulls and should limit the downside for the currency pair. 

The hotter-than-expected US consumer inflation figures released on Wednesday forced investors to push back their expectations about the timing of the first interest rate cut by the Fed to September from June. Investors also pared their bets for the number of rate cuts of 25 basis points (bps) this year to fewer than two, or roughly 42 bps, from about three or four a few weeks ago. This remains supportive of elevated US Treasury bond yields and assists the USD to stand tall near its highest level since November touched on Thursday, validating the near-term positive outlook for the USD/CAD pair. 

Even from a technical perspective, the post-US CPI strength above the 1.3600-1.3610 barrier and the subsequent move up suggests that the path of least resistance for spot prices is to the upside. Market participants now look to the release of the Preliminary Michigan Consumer Sentiment Index, due later during the North American session. Apart from this, speeches by FOMC members will drive the USD demand. This, along with Oil price dynamics, should produce short-term trading opportunities around the USD/CAD pair, which seems poised to register gains for the second straight week.

USD/CAD

Overview
Today last price 1.3689
Today Daily Change 0.0000
Today Daily Change % -0.00
Today daily open 1.3689
 
Trends
Daily SMA20 1.357
Daily SMA50 1.3533
Daily SMA100 1.3483
Daily SMA200 1.3512
 
Levels
Previous Daily High 1.3726
Previous Daily Low 1.3661
Previous Weekly High 1.3648
Previous Weekly Low 1.3478
Previous Monthly High 1.3614
Previous Monthly Low 1.342
Daily Fibonacci 38.2% 1.3701
Daily Fibonacci 61.8% 1.3686
Daily Pivot Point S1 1.3658
Daily Pivot Point S2 1.3627
Daily Pivot Point S3 1.3593
Daily Pivot Point R1 1.3723
Daily Pivot Point R2 1.3757
Daily Pivot Point R3 1.3788

 

 

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