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USDCAD NEWS : USDCAD flirts with 100-day SMA, below mid-1.3200s ahead of Canadian CPI/US Retail Sales

USDCAD NEWS

USDCAD NEWS : USDCAD flirts with 100-day SMA, below mid-1.3200s ahead of Canadian CPI/US Retail Sales

  • USDCAD drops back closer to a nearly two-month low amid renewed USD selling bias.
  • A positive risk tone and bets for less aggressive Fed rate hikes weigh on the greenback.
  • An intraday uptick in oil prices underpins the Loonie and also exerts pressure on the pair
  • Traders now look to the Canadian CPI report and US Retail Sales data for a fresh impetus.

USDCAD NEWS : The USDCAD pair struggles to capitalize on its modest intraday uptick to levels just above the 1.3300 mark and turns lower for the second successive day on Wednesday. The pair remains depressed through the first half of the European session and is currently flirting with the 100-day SMA support, around the 1.3230 area, or a nearly two-month low touched on Tuesday.

A goodish recovery in the global risk sentiment prompts fresh selling around the safe-haven US Dollar, which, in turn, is seen as a key factor exerting downward pressure on the USDCAD pair. Investors’ turned optimistic after the initial findings suggested that the missile that hit Poland on Tuesday may have been fired by Ukraine at an incoming Russian missile. This, along with firming expectations that the Federal Reserve will soften its hawkish stance, continues to weigh on the greenback.

Apart from this, an intraday bounce in crude oil prices underpins the commodity-linked Loonie and also contributes to the offered tone surrounding the USDCAD pair. That said, concerns about lower fuel consumption in China – amid rising COVID-19 cases – could act as a headwind for the black liquid. This could help limit losses for the USDCAD pair ahead of the latest consumer inflation figures from Canada and the US monthly Retail Sales data, due later during the early North American session.

USDCAD NEWS : Even from a technical perspective, the USDCAD pair, so far, has been showing some resilience near the 100-day SMA. This makes it prudent to wait for some follow-through selling below the overnight swing low, around the 1.3225 region, before positioning for further losses. That said, the head and shoulders topping pattern that formed between September and November has still not fallen to even its conservative target at 1.3205 (the 61.8% extension of the pattern’s height), and is still far from hitting the 100% extrapolation at around 1.3020, so this suggests the potential for more downside. 

Meanwhile, any attempted recovery might confront a hurdle around the 1.3300 mark and remain capped near the 1.3335 supply zone. The latter should act as a pivotal point, which if cleared might trigger a short-covering rally.

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FIRST CAPITALS brand is authorized and regulated in various jurisdictions.

First Capitals Limited (www.First Capitals.com/eu) is regulated by the Cyprus Securities and Exchange Commission with CIF license number 185/12, licensed by the Financial Sector Conduct Authority (FSCA) of South Africa, with FSP No. 46614. The company is also registered with the Financial Conduct Authority of the UK with number 600475.

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Exinity Limited is a member of Financial Commission, an international organization engaged in a resolution of disputes within the financial services industry in the Forex market.

Risk Warning: Trading Forex and Leveraged Financial Instruments involves significant risk and can result in the loss of your invested capital. You should not invest more than you can afford to lose and should ensure that you fully understand the risks involved. Trading leveraged products may not be suitable for all investors. Trading non-leveraged products such as stocks also involves risk as the value of a stock can fall as well as rise, which could mean getting back less than you originally put in. Past performance is no guarantee of future results. Before trading, please take into consideration your level of experience, investment objectives and seek independent financial advice if necessary. It is the responsibility of the Client to ascertain whether he/she is permitted to use the services of the FIRST CAPITALS brand based on the legal requirements in his/her country of residence.  Please read FIRST CAPITALS’s full Risk Disclosure.

Regional restrictions: FIRST CAPITALS brand does not provide services to residents of the USA, Mauritius, Japan, Canada, Haiti, Suriname, the Democratic Republic of Korea, Puerto Rico, Brazil, the Occupied Area of Cyprus and Hong Kong. Find out more in the Regulations section of our FAQs.

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