USD/CAD Price Tumbling To 1.27 As USD Retraces, WTI Gains

The USD/CAD price accepts bids to refresh its daily lows of 1.2730, down 0.25% the day before Tuesday’s European session. Despite the pair turning from the previous day’s highs in late September, the lack of catalysts and risk appetite ultimately affected the price.

10 and one 10 us dollar bill

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The market sentiment is improving amid the absence of virus deaths and expectations of finding a cure for South Africa’s COVID-19 strain known as Omicron. Moreover, the People’s Bank of China’s (PBOC) actions on the regulatory reserve ratio (RRR) and Japan’s willingness to offer record incentives have raised risk sentiment.

In addition to mixed trade data from China, Moody’s stable outlook for Chinese financial institutions, and cautious optimism from the Reserve Bank of Australia (RBA), sentiment is rising.

Stock futures yields and US Treasury yields have risen earlier this week, but the US Dollar Index (DXY) recently declined 0.05% for around 96.20 on the day.

Further, increased risk appetite and weakening DXY helped boost Canada’s top export, WTI crude, to a weekly high that rose 1.0% to around $ 70.40 on the day of release. As a result, further downward pressure is being applied to USD/CAD prices.

To guide short-term USD/CAD movements, November data on US trade, non-farm productivity, and unit labor cost will be added to the Canadian International Commodity Trading Index and the Ivy Purchasing Managers’ Index. The weekly data on private oil reserves will also be important. However, on Friday, high-quality catalysts will be more important for some new momentum ahead of the US Consumer Price Index (CPI).

USD/CAD Price Technical Analysis: Vulnerable Below Key SMAs

(Click on image to enlarge)

usd/cad price

The USD/CAD pair looks vulnerable below the 20-period and 50-period SMAs on the 4-hour chart. The pair is looking south towards 1.2700 ahead of 200-period SMA around 1.2650. The volume figures also show a bearish scenario.

On the flip side, the pair may attempt to regain the 1.2750 area ahead of 1.2800. However, the odds f sustaining above the 20-period SMA are low.

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