USD/CAD retreats from YTD high hovers around 1.2930s

The Loonie advances 0.12% versus the greenback amid a risk-on market mood.
Rising crude oil prices underpin the Canadian dollar, the US dollar weakens.
Canadian Retail Sales rose by 1.6%, more than the 1.0% estimated, the Loonie barely moved.

Christian Borjon Valencia FXStreet

During the New York session, the USD/CAD grinds lower, trading at 1.2925 at the time of writing. The market sentiment has improved, as shown by risk-sensitive currencies like the CAD, the GBP, and the AUD got bid in the overnight session, while safe-haven peers drop.

Positive news regarding vaccines helping tame the Omicron variant improved investors’ mood. That alongside high crude oil prices, with Western Texas Intermediate (WTI), the US crude oil benchmark up some 2.55% trading at $70.36 a barrel, underpins the Loonie, which trims some of the last week’s losses, as appetite for the greenback has improved.

In the meantime, the US Dollar Index, which tracks the buck’s performance vs. a basket of six rivals, drops some 0.02%, sitting at 96.53.

The Canadian economic docket featured Retail Sales for November. Statistics Canada announced that sales rose by 1.6% on a monthly basis reading, higher than the 1.0% estimated and a strong rebound after September’s 0.6% decline. Retail Sales excluding Autos increased by 1.3%, also stronger than the 0.8% estimations.

Additionally, USD/CAD traders would lean in US macroeconomic data. On Wednesday, the Gross Domestic Product for the Q3 and Fed’s favorite gauge of inflation, the Personal Consumption Expenditures Prices (PCE) for the Q3, will be released. By Thursday, Initial Jobless Claims and Durable Good Orders would be scrutinized by market participants.

USD/CAD Price Forecast: Technical outlook

The USD/CAD broke strong resistance found at the December 3 high at 1.2853. In the last two days, the pair has been trading range-bound in the 1.2850-1.2960 area, and as the year-end looms, it could probably remain subdued.

In the event of breaking to the upside, the first resistance would be 1.3000. A clear break of that level would expose November 13, 2020, high at 1.3172.

On the flip side, failure at 1.2960 would open the door for further losses. The first support would be 1.2900. The breach of the latter could send the pair sliding towards the December 3 high previous resistance-turned-support at 1.2853, and then the 1.2800 figure.

USD/CAD

Overview
Today last price	1.2925
Today Daily Change	-0.0015
Today Daily Change %	-0.12
Today daily open	1.294

Trends
Daily SMA20	1.277
Daily SMA50	1.2579
Daily SMA100	1.2603
Daily SMA200	1.2486

Levels
Previous Daily High	1.2964
Previous Daily Low	1.2881
Previous Weekly High	1.2937
Previous Weekly Low	1.2706
Previous Monthly High	1.2837
Previous Monthly Low	1.2352
Daily Fibonacci 38.2%	1.2933
Daily Fibonacci 61.8%	1.2913
Daily Pivot Point S1	1.2893
Daily Pivot Point S2	1.2846
Daily Pivot Point S3	1.281
Daily Pivot Point R1	1.2975
Daily Pivot Point R2	1.3011
Daily Pivot Point R3	1.3058

Author

Christian Borjon Valencia

FXStreet

Markets analyst, news editor, and trading instructor with over 14 years of experience across FX, commodities, US equity indices, and global macro markets.

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