USD/CAD seesaws near 1.3550 amid firmer Oil price, Fed Minutes, US/Canada employment eyed


  • USD/CAD struggles to defend the first daily gain in three, retreats of late.
  • Oil prices remain firmer despite fears of receding energy demand from China.
  • US Dollar bears the burden of softer data, fails to cheer firmer yields.
  • Holidays in multiple markets restrict USD/CAD moves ahead of the key data/events.

USD/CAD takes offers to reverse the year-start gains around 1.3550 even as holiday-thinned markets probe traders during early Monday.

In doing so, the Loonie pair cheers firmer prices of Canada’s main export item, WTI crude oil, despite the US Dollar’s recent corrective bounce. It’s worth noting, however, that the lack of major data/events and cautious mood ahead of the Minutes of the latest Federal Open Market Committee (FOMC) meeting, as well as Friday’s December month employment numbers for the US and Canada, probe the Loonie pair traders.

WTI crude oil rose the most in over a week the previous day, grinding near $80.50 at the latest, as a softer US Dollar helped the black gold buyers despite fears of easing demand, mainly due to the Covid fears emanating from China. Also acting as the challenge for the WTI bulls, but were ignored, were the headlines from the US Energy Information Administration (EIA) as it said, “Demand for US crude and petroleum products fell in October even as oil production ticked up to its highest levels since the COVID-19 pandemic.”

On the other hand, the US Dollar Index (DXY) refreshed a six-month low of around 103.40 after witnessing downbeat US data, near 103.47 by the press time. That said, Chicago Purchasing Managers’ Index crossed the market consensus of 41.2 and the 37.2 previous readings to print the 44.9 figures for December. Even so, the activity gauge signaled contraction for the fourth consecutive month. It should be noted that the year-end consolidation also weighed on the DXY amid the sluggish sessions.

The recent updates from China and the International Monetary Fund (IMF), however, appear to challenge the USD/CAD moves going forward.

On Saturday, Chinese President Xi Jinping appeared in a televised speech to mark the New Year and called on for more effort and unity as the country enters a "new phase" in its approach to combating the pandemic. On the same line, China’s NBS Manufacturing purchasing managers' index (PMI) fell to 47.0 in December versus 48.0 market expectations and prior, marking the biggest drop in activities since February 2020. Further, the Non-Manufacturing PMI also slumped to 41.6 during the stated month versus 46.7 previous readings.

Following that, IMF’s Managing Director Kristalina Georgieva said that the New Year is going to be tougher than the year we leave behind. The IMF Chief also added, “Why? Because the three big economies – the US, EU and China – are all slowing down simultaneously.”

Amid these plays, Wall Street closed with losses while the US 10-year Treasury bond yields rose 4.5 basis points (bps) to 3.879%.

Looking forward, holidays in multiple markets could restrict the USD/CAD intraday moves, in addition to the cautious mood ahead of the key data/events. However, the bears appear to run out of steam and hence the odds of witnessing a recovery are high. As a result, the aforementioned catalysts, namely the Fed Minutes and employment numbers for the US and Canada, will be reacted with more strength in the case suggesting the Loonie pair’s rebound.

Technical analysis

Although the USD/CAD pair bounces off 50-DMA support, around 1.3520 by the press time, the recovery remains elusive unless it crosses the previous support line from November 15, near 1.3625 at the latest.

Additional important levels

Overview
Today last price 1.3533
Today Daily Change -0.0007
Today Daily Change % -0.05%
Today daily open 1.354
 
Trends
Daily SMA20 1.3607
Daily SMA50 1.3527
Daily SMA100 1.3444
Daily SMA200 1.3122
 
Levels
Previous Daily High 1.3582
Previous Daily Low 1.3514
Previous Weekly High 1.3612
Previous Weekly Low 1.3484
Previous Monthly High 1.3705
Previous Monthly Low 1.3385
Daily Fibonacci 38.2% 1.354
Daily Fibonacci 61.8% 1.3556
Daily Pivot Point S1 1.3508
Daily Pivot Point S2 1.3477
Daily Pivot Point S3 1.344
Daily Pivot Point R1 1.3576
Daily Pivot Point R2 1.3613
Daily Pivot Point R3 1.3644

 

 

Share: Feed news

Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers. The author will not be held responsible for information that is found at the end of links posted on this page.

If not otherwise explicitly mentioned in the body of the article, at the time of writing, the author has no position in any stock mentioned in this article and no business relationship with any company mentioned. The author has not received compensation for writing this article, other than from FXStreet.

FXStreet and the author do not provide personalized recommendations. The author makes no representations as to the accuracy, completeness, or suitability of this information. FXStreet and the author will not be liable for any errors, omissions or any losses, injuries or damages arising from this information and its display or use. Errors and omissions excepted.

The author and FXStreet are not registered investment advisors and nothing in this article is intended to be investment advice.

Recommended content


Recommended content

Editors’ Picks

AUD/USD holds higher ground near 0.6600 after strong China's Caixin Services PMI

AUD/USD holds higher ground near 0.6600 after strong China's Caixin Services PMI

AUD/USD holds higher ground near the 0.6600 mark early Tuesday. Strong China's Caixin Services PMI data for October underpins the Aussie amid a modest US Dollar uptick and a tepid risk tone. Traders remain reluctant ahead of the RBA policy decision and the US presidential election. 

AUD/USD News
USD/JPY rises toward 152.50, despite strong Japan's PMI, cautious mood

USD/JPY rises toward 152.50, despite strong Japan's PMI, cautious mood

USD/JPY has picked up fresh bids to test 152.50 in Asian trading on Tuesday, tracking the renewed US Dollar strength. The pair shrugs off strong Japanese PMI data and a cautious market mood. Traders remain wary as Americans head to polls this Tuesday. 

USD/JPY News
Gold traders appear non-committal on the US election day

Gold traders appear non-committal on the US election day

Gold price is miring in five-day lows near $2,730 in Asian trading on Tuesday, lacking a clear direction. Traders remain wary and refrain from placing fresh bets on Gold price on the US presidential election day.  

Gold News
Bitcoin ETFs beat Gold ETFs with 65% gain since launch

Bitcoin ETFs beat Gold ETFs with 65% gain since launch

Bitcoin ETFs have reshaped the digital asset investment landscape since their approval in January. Their total assets under management climbed over $70 billion during the weekend, placing them ahead of other investment products, including gold.

Read more
US presidential election outcome: What could it mean for the US Dollar?

US presidential election outcome: What could it mean for the US Dollar? Premium

The US Dollar has regained lost momentum against its six major rivals at the beginning of the final quarter of 2024, as tensions mount ahead of the highly anticipated United States Presidential election due on November 5.

Read more
Best Forex Brokers with Low Spreads

Best Forex Brokers with Low Spreads

VERIFIED Low spreads are crucial for reducing trading costs. Explore top Forex brokers offering competitive spreads and high leverage. Compare options for EUR/USD, GBP/USD, USD/JPY, and Gold.

Read More

Forex MAJORS

Cryptocurrencies

Signatures