USD/CAD updates its daily high and breaks above 1.3000 after the US data.

  • USD/CAD regains positive traction on Wednesday and reverses some of the overnight decline.
  • Increased bets on an aggressive Fed rate hike help revive dollar demand and extend support.
  • Mostly bullish US Durable Goods Orders continue to support intraday USD strength.
  • A rebound in oil prices could prop up the loonie and keep any significant upside capped.

The pair USD/CAD maintains its bid tone throughout the early American session and rises to a fresh daily high in the last hour, with bulls looking to build on momentum beyond the key psychological 1.3000 level.

The US dollar rebounds strongly on Wednesday and is back close to the two-decade highs hit the day before, which in turn extends support for the USD/CAD pair. Disappointing US PMI data on Tuesday and weak US home sales data had fueled speculation that the Fed could be less aggressive in its rate hike cycle. However, statements by Minneapolis Fed President Neel Kashkari, who has moved the most, have reignited expectations of a large-scale interest rate hike in September and pushed the dollar higher.

Intraday dollar buying remains well supported by mostly upbeat US Durable Goods Orders data. The US Census Bureau reported that core orders were flat month-on-month in July, disappointing expectations for a 0.6% rise. The disappointment, however, was offset by an upward revision to the previous month’s reading, which showed 2.2% growth. Additionally, orders excluding transportation items posted slightly better-than-expected growth of 0.3%, reaffirming the Fed’s expectations.

In fact, current market prices indicate that there is a better chance that the Fed will raise interest rates by 75 basis points at the September meeting. This continues to support elevated US Treasury yields and continues to support the dollar. That said, a modest rally in crude oil prices to a three-week high appears to underpin the commodity-linked loonie and could cap USD/CAD gains. Nonetheless, spot prices have managed to reverse some of last night’s corrective decline from a six-week high.

Technical levels

USD/CAD

Panorama
Last Price Today 1.3008
Today’s Daily Change 0.0054
Today’s Daily Change % 0.42
Today’s Daily Opening 1.2954
Trends
20 Daily SMA 1.2874
50 Daily SMA 1.2915
100 Daily SMA 1,283
200 Daily SMA 1.2761
levels
Previous Daily High 1.3063
Previous Daily Minimum 1.2933
Previous Maximum Weekly 1.3009
Previous Weekly Minimum 1.2769
Monthly Prior Maximum 1.3224
Previous Monthly Minimum 1.2789
Daily Fibonacci 38.2% 1.2983
Daily Fibonacci 61.8% 1.3014
Daily Pivot Point S1 1.2904
Daily Pivot Point S2 1.2854
Daily Pivot Point S3 1.2774
Daily Pivot Point R1 1.3033
Daily Pivot Point R2 1.3113
Daily Pivot Point R3 1.3163

Source: Fx Street

You may also like