• A modest USD uptick helped regain some positive traction on Tuesday.
• Bullish oil prices do little to underpin Loonie/attract some fresh selling.
• Traders seemed reluctant to place bets ahead of Wednesday’s BoC meeting.
The USD/CAD pair regained positive traction on Tuesday and recovered a major part of the previous session's sharp intraday downfall.
The commodity-linked currency - Loonie was among the strongest ones at the start of a new trading week and was underpinned by a fresh leg of an upsurge in crude oil prices, supported by news that the US plans to halt waivers for countries that import Iranian oil.
Having repeatedly failed to build on its momentum beyond the 1.3400 handle, the pair witnessed a modest pullback at the start of a new trading week, though lacked any strong bearish follow-through on Tuesday amid a modest US Dollar uptick.
The move clearly underscores investors' reluctance to place any aggressive bets ahead of the latest BoC monetary policy update on Wednesday, where the central bank may again strike a more cautious tone amid the recent softness in the domestic economy.
This coupled with important US macro data, including the advance US GDP report on Friday, would play an important role in determining the pair's next leg of a directional move. Hence, it would be prudent to wait for a sustained move in either direction before positioning for the near-term trajectory.
In the meantime, the USD/oil price dynamics might continue to act as key determinants of the pair's momentum through Tuesday's trading session amid absent relevant market moving economic releases, either from the US or Canada.
Technical levels to watch
Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers. The author will not be held responsible for information that is found at the end of links posted on this page.
If not otherwise explicitly mentioned in the body of the article, at the time of writing, the author has no position in any stock mentioned in this article and no business relationship with any company mentioned. The author has not received compensation for writing this article, other than from FXStreet.
FXStreet and the author do not provide personalized recommendations. The author makes no representations as to the accuracy, completeness, or suitability of this information. FXStreet and the author will not be liable for any errors, omissions or any losses, injuries or damages arising from this information and its display or use. Errors and omissions excepted.
The author and FXStreet are not registered investment advisors and nothing in this article is intended to be investment advice.
Recommended content
Editors’ Picks
EUR/USD clings to daily gains above 1.0650
EUR/USD gained traction and turned positive on the day above 1.0650. The improvement seen in risk mood following the earlier flight to safety weighs on the US Dollar ahead of the weekend and helps the pair push higher.
GBP/USD recovers toward 1.2450 after UK Retail Sales data
GBP/USD reversed its direction and advanced to the 1.2450 area after touching a fresh multi-month low below 1.2400 in the Asian session. The positive shift seen in risk mood on easing fears over a deepening Iran-Israel conflict supports the pair.
Gold holds steady at around $2,380 following earlier spike
Gold stabilized near $2,380 after spiking above $2,400 with the immediate reaction to reports of Israel striking Iran. Meanwhile, the pullback seen in the US Treasury bond yields helps XAU/USD hold its ground.
Bitcoin Weekly Forecast: BTC post-halving rally could be partially priced in Premium
Bitcoin price shows no signs of directional bias while it holds above $60,000. The fourth BTC halving is partially priced in, according to Deutsche Bank’s research.
Week ahead – US GDP and BoJ decision on top of next week’s agenda
US GDP, core PCE and PMIs the next tests for the Dollar. Investors await BoJ for guidance about next rate hike. EU and UK PMIs, as well as Australian CPIs also on tap.