USD/CAD struggles for direction, confined in a range below 1.2700 mark

USD/CAD extended its directionless price move for the second straight session on Thursday.
Bullish oil prices underpinned the loonie and kept a lid on any meaningful upside for the pair.
The USD found some support amid rallying US bond yields, which helped limit the downside.

Haresh Menghani FXStreet

The USD/CAD pair struggled for a firm direction and remained confined in a narrow trading band, below the 1.2700 mark through the early European session.

A combination of diverging forces failed to provide any meaningful impetus to the major, instead led to subdued/range-bound price action for the second consecutive session on Thursday. The prevalent bullish sentiment surrounding crude oil prices underpinned the commodity-linked loonie and capped the upside for the USD/CAD pair.

Oil prices rose to the highest level since February last year on Thursday and remained well supported by Saudi Arabia's unilateral decision to cut output over the next two months. The commodity got an additional boost after the Energy Information Administration on Wednesday reported a larger-than-anticipated fall in US stockpiles.

Meanwhile, the market has been pricing in the possibility of a more expansive fiscal policy in the wake of a Democratic victory in the crucial US Senate runoff elections in the state of Georgia. Expectations of larger government borrowing pushed the benchmark 10-year US Treasury yield further beyond 1.0% mark, to the highest level since March 2020.

Rallying US bond yields extended some support to the US dollar, which, in turn, was seen as one of the key factors lending some support to the USD/CAD pair. That said, the pair's inability to register any meaningful recovery suggests that the recent downtrend might still be far from being over and warrants some caution for bullish traders.

Hence, it will be prudent to wait for some strong follow-through buying before confirming that the USD/CAD pair has bottomed out in the near-term and positioning for any meaningful recovery. Market participants now look forward to the US economic releases – Initial Weekly Jobless Claims and ISM Services PMI – for a fresh trading impetus.

Technical levels to watch

USD/CAD

Overview
Today last price	1.2692
Today Daily Change	0.0022
Today Daily Change %	0.17
Today daily open	1.267

Trends
Daily SMA20	1.2777
Daily SMA50	1.2933
Daily SMA100	1.3067
Daily SMA200	1.3382

Levels
Previous Daily High	1.2724
Previous Daily Low	1.263
Previous Weekly High	1.2876
Previous Weekly Low	1.2714
Previous Monthly High	1.301
Previous Monthly Low	1.2688
Daily Fibonacci 38.2%	1.2666
Daily Fibonacci 61.8%	1.2688
Daily Pivot Point S1	1.2626
Daily Pivot Point S2	1.2581
Daily Pivot Point S3	1.2532
Daily Pivot Point R1	1.2719
Daily Pivot Point R2	1.2768
Daily Pivot Point R3	1.2813

Author

Haresh Menghani

FXStreet

Haresh Menghani is a detail-oriented professional with 10+ years of extensive experience in analysing the global financial markets.

GBP/USD stays slightly offered below 1.3600

Following an initial drop to fresh six-day lows, GBP/USD now picks up some updside traction and trades in levels just shy of the 1.3600 barrier on Thursday. The generalised cautious tone among market participants continue to underpin the Greenback ahead of Friday’s data releases and the Fed Warsh’s speech.

EUR/USD struggles for direction around 1.1650

EUR/USD gyrates around the 1.1650 region amid the absence of clear direction and following an earlier drop to the 1.630 area. The pair’s vacillating mood comes in response to the equally irresolute price action in the US Dollar as investors warm up for the release of the NFP Annual Revision and the speech by the Fed’s Warsh at the Jackson Hole Symposium, both events due on Friday.

Gold recovers $4,600, buyers unwilling to give up

Gold adds to Wednesday’s pullback, although it manages to pick up some pace and come closer to the $4,600 mark per troy ounce on Thursday. In the meantime, the yellow metal remains on the back foot despite the widespread caution and the lack of clear direction of the US Dollar.

Ripple rebounds as whales accumulate 460 million XRP

Ripple (XRP) holds above $1.40 support on Wednesday, as bulls return to take control following three consecutive days of declines. The remittance token’s upside appears capped at $1.50 while extended gains would face additional resistance at $1.70. A break above $2.00 would mark a potential regime shift from bearish to bullish.

Diesel’s record $100 warning: The oil shock hiding in plain sight

The Oil market may look calmer than it did a few months ago, but diesel is sending a very different message. The US diesel crack spread, the premium of ultra-low sulphur diesel futures over WTI, recently surged above $100 per barrel for the first time, reaching an intraday record of just over $102.00.

Kevin Warsh’s Jackson Hole dilemma: Say too much, too little, or just enough

Kevin Warsh is preparing to deliver his first Jackson Hole speech as Federal Reserve (Fed) Chair on Friday, and expectations extend well beyond whether interest rates will be raised or left unchanged in September.