USD/CAD pares intraday gains around mid-1.3600s as Oil price rebounds, BOC’s Macklem eyed – Crypto News – Crypto News
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USD/CAD climbs to 1.3200 neighborhood amid sliding oil prices, modest USD strength USD/CAD climbs to 1.3200 neighborhood amid sliding oil prices, modest USD strength

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USD/CAD pares intraday gains around mid-1.3600s as Oil price rebounds, BOC’s Macklem eyed – Crypto News

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3 years ago

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  • USD/CAD retreats from intraday highs, struggles to defend buyers.
  • WTI bounces off annual low, snaps six-day downtrend amid fears of supply crunch.
  • Sour sentiment, anxiety ahead of key data/events underpin US Dollar.
  • Speech from BOC Governor Maclem can entertain traders ahead of bumper catalysts.

USD/CAD consolidates daily gains around 1.3650 heading into Monday’s European session as the Loonie pair traders turn cautious ahead of a speech from Bank of Canada (BOC) Governor Tiff Macklem. Also challenging the pair buyers could be the recently firmer prices of Canada’s key export item, WTI crude oil.

It’s worth noting, however, that the hawkish fed bets and recession woes keep the US Dollar firmer as traders await Tuesday’s US Consumer Price Index (CPI) and Wednesday’s Federal Open Market Committee (FOMC) meeting.

WTI crude oil prints mild gains around $71.80 as it bounces off the annual low while snapping a six-day downtrend. In doing so, the black gold portrays the supply crunch fears as Russian President Vladimir Putin rejects supplying oil to those countries who accept the European Union (EU)-led oil price caps. Also likely to challenge the oil flow could be the shutdown of the key pipeline supplying energy benchmark to the US, namely the Keystone pipeline. On Sunday, Canada’s TC Energy said it has not yet determined the cause of the Keystone oil pipeline leak last week in the United States, while also not giving a timeline as to when the pipeline will resume operations, reported Reuters.

On the other hand, the US Dollar Index (DXY) extends Friday’s gains amid recession woes, recently highlighted by US Treasury Secretary Janet Yellen.

On Friday, the US Producer Price Index (PPI) matched the market forecasts of 7.4% YoY for November versus 8.1% prior. Further, the Core PPI rose to 6.2% YoY versus 6.0% expected and 6.7% from previous readings. Additionally, preliminary readings of the University of Michigan’s (UoM) Consumer Sentiment Index rose to 59.1 for December versus 53.3 market forecasts and 56.8 final readings for November. Furthermore, the 1-year inflation expectations dropped to 4.6%, the lowest since September 2021 while compared to 4.9% expected whereas 5-10 year expectations were stable at 3.0%. It should be noted that the US ISM Services PMI improved to 56.5 versus 54.4 expected.

While portraying the mood, the markets witnessed a sluggish start to the key week with mildly offered S&P 500 futures and inactive Treasury yields.

To sum up, mixed sentiment and anxiety prior to the crucial data/events can keep the USD/CAD on the front foot even if the latest rebound in oil prices probe the upside moves. It should be noted that the absence of hawkish remarks from BOC’s Macklem could help the Loonie pair to remain firmer as the Canadian central bank has recently ruled out odds of aggressive rate hikes.

technical analysis

A daily closing beyond the seven-week-old descending resistance line, around 1.3655, becomes necessary for the USD/CAD bulls to keep the reins. However, the pair bears are off the table unless witnessing a clear downside break of the previous resistance line from October 13, close to 1.3510 at the latest.

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