USD/CAD Analysis

Forex Market Analysis - USD/CAD currency pair side-lined below mid-1.3900s, Powell’s testimony expected

  • USD/CAD currency pair remained depressed through the mid-European session on Tuesday.
  • The upbeat market mood, slippy United States bond yields undermined the USD demand.
  • A modest pickup in oil costs benefitted the loonie and exerted some pressure.
  • Traders appeared reluctant to position aggressive bets before Powell’s testimony.

The USD/CAD currency pair did not maximize its tried intraday recovery move, instead met with some recent provide close to the 1.3970 regions. The currency pair was last seen trading with a slight negative bias close to the 1.3925 regions, well inside the putting distance of one-week lows set earlier this Tuesday.

The currency pair remained depressed for the second straight session and was being weighed down by a mix of things – sustained United States dollar selling bias and positive crude oil costs. The currency pair, however, showed some resilience at lower levels then so much, has managed to defend the 1.3900 round-figure marks.

The optimism over the re-opening of economies in some elements of the planet and inspiring knowledge on coronavirus vaccinum trial weighed on the USD’s safe-haven standing. Adding to the current, a modest pullback within the United States Treasury bond yields conjointly undermined the dollar demand and exerted some pressure on the USD/CAD currency pair.

This in addition to an intraday pickup in oil costs benefitted the commodity-linked currency – the loonie – and any contributed to the pair’s weaker tone through the mid-European session. Oil costs remained well supported by signs of gradual demand recovery on the rear of easing imprisonment restrictions globally.

Meanwhile, investors appeared reluctant to position any aggressive bets, rather most well-liked to attend on the sidelines before the Fed Chair Jerome Powell’s legislature testimony. Powell’s comments are closely scrutinized for any more financial easing, which can play a key role in influencing the near-term USD value dynamics and supply a recent directional impetus to the USD/CAD currency pair.

USD/CAD pair finds resistance close to 1.3600, turns flat close to 1.3570 before U.S. data

  1. USD/CAD currency pair didn’t break higher than 1.3600 throughout the EU session.
  2. Rising crude oil costs facilitate the loonie notice demand.
  3. US greenback Index consolidates Tuesday’s losses before U.S. data.

The USD/CAD currency pair closed the primary day of the week with modesty lower and extended its slide to a daily low of 1.3509 throughout the Asian session. Though the currency pair staged a decisive rebound throughout the EU forex trading hours, it didn’t break higher than 1.3600 and erased its gains. As of writing, the USD/CAD pair nearly unchanged on the day at 1.3565.

The rebound witnessed in crude oil costs looks to be serving to the commodity-sensitive loonie preserve its strength against the dollar. When dropping below $35 on Monday, the barrel of West Texas Intermediate (WTI) closed the day within the positive territory boosted by the rising market sentiment. The WTI continuing to edge higher and was last seen rising 1.82% on the day at $37.75.

Eyes on U.S. data and Powell’s testimony

On the opposite hand, the dollar came below a revived selling pressure at the beginning of the week when the Federal Reserve declared that it’ll be buying a distributed portfolio of company bonds to support the economy.

The U.S. greenback Index (DXY) lost 0.5% and closed the day at 96.60 on Monday and looks to be having a tricky time convalescent its losses. At the instant, the DXY is flat on the day at 99.60.

In the last half of the day, Retail Sales information from the U.S. is looked upon for recent impetus. Additionally significantly, Jerome Powell, Chairman of the Federal Reserve, can testify on Capitol Hill at 1400 GMT.