Market news

24 November 2021

USD/CAD holds above mid-1.2600s, downside seems protected ahead of key US data

  • USD/CAD struggled to capitalize on its intraday positive move and failed near the 1.2700 mark.
  • Positive oil prices underpinned the loonie and capped the upside amid a subdued USD demand.
  • Hawkish Fed expectations continued acting as a tailwind for the USD and should help limit losses.

The USD/CAD pair surrendered modest intraday gains and has now retreated to the lower end of its daily trading range, around the 1.2665 region.

The pair gained some positive traction during the early part of the trading action on Wednesday, albeit struggled to capitalize on the move and the uptick faltered ahead of the 1.2700 mark. Crude oil prices added to the previous day's strong gains and climbed to a fresh weekly high. This, in turn, underpinned the commodity-linked loonie and acted as a headwind for the USD/CAD pair amid a subdued US dollar price action.

The USD extended its consolidative price move near a 16-month peak for the second successive day amid retreating US Treasury bond yields. That said, the prospects for an early policy tightening by the Fed, reinforced by Jerome Powell's renomination as the Fed chair, continued underpinning the buck. This should help limit any deeper losses for the USD/CAD pair, warranting some caution before placing fresh bearish bets.

Investors seem convinced that the Fed would be forced to adopt a more aggressive policy response to contain stubbornly high inflation. In fact, the markets have been pricing in the possibility for a rate hike move by July 2022. Moreover, the Fed fund futures indicate a high likelihood for another raise in November. This makes it prudent to wait for some follow-through selling before confirming a near-term top for the USD/CAD pair.

Market participants now look forward to the US economic docket, highlighting the releases of the Prelim (second estimate) US Q3 GDP, Durable Goods Orders and Core PCE Price Index. This, along with the FOMC meeting minutes, will influence the USD and provide a fresh impetus to the USD/CAD pair. Apart from this, traders will take cues from oil price dynamics to grab some short-term opportunities around the major.

Technical levels to watch

 

Market Focus

Material posted here is solely for information purposes and reliance on this may lead to losses. Past performances are not a reliable indicator of future results. Please read our full disclaimer.

Open Demo Account
I understand and accept the Privacy Policy and agree that my name and contact details can be used by TeleTrade to contact me about the information I have selected.
23 International Awards
Have a question?

We are ready to assist you in every step of your trading experience
by providing 24/5 multilingual customer support.

Follow us

Risk Warning: Trading Forex and CFDs on margin carries a high level of risk and may not be suitable for all investors. CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 76.41% of retail investor accounts lose money when trading CFDs with this provider. You should consider whether you understand how CFDs work and whether you can afford to take the high risk of losing your money. Prior to trading, you should take into consideration your level of experience and financial situation. TeleTrade strives to provide you with all the necessary information and protective measures, but, if the risks seem still unclear to you, please seek independent advice.

© 2011-2022 Teletrade-DJ International Consulting Ltd

Teletrade-DJ International Consulting Ltd is registered as a Cyprus Investment Firm (CIF) under registration number HE272810 and is licensed by the Cyprus Securities and Exchange Commission (CySEC) under license number 158/11.

The company operates in accordance with the Markets in Financial Instruments Directive (MiFID).

The content on this website is for information purposes only. All the services and information provided have been obtained from sources deemed to be reliable. Teletrade-DJ International Consulting Ltd ("TeleTrade") and/or any third-party information providers provide the services and information without warranty of any kind. By using this information and services you agree that under no circumstances shall TeleTrade have any liability to any person or entity for any loss or damage in whole or part caused by reliance on such information and services.

TeleTrade cooperates exclusively with regulated financial institutions for the safekeeping of clients' funds. Please see the entire list of banks and payment service providers entrusted with the handling of clients' funds.

Please read our full Terms of Use.

To maximise our visitors' browsing experience, TeleTrade uses cookies in our web services. By continuing to browse this site you agree to our use of cookies.

Teletrade-DJ International Consulting Ltd currently provides its services on a cross-border basis, within EEA states (except Belgium) under the MiFID passporting regime, and in selected 3rd countries. TeleTrade does not provide its services to residents or nationals of the USA.

Material posted here is solely for information purposes and reliance on this may lead to losses. Past performances are not a reliable indicator of future results. Please read our full disclaimer.

CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 76.41% of retail investor accounts lose money when trading CFDs with this provider. You should consider whether you understand how CFDs work and whether you can afford to take the high risk of losing your money.
Choose your language/location