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USD/CAD holds steady around 1.2765

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  • Market sentiment has improved moderately as it appears that symptoms of the omicron variant are trending mild. According to South African health authorities.
  • The US dollar index gains some traction as investors weigh the impact of the new variant.
  • USD/CAD in the short term has a bullish bias, would find resistance around 1.2800.

USD/CAD fell in the Asian session on Monday as COVID-19 fears about the omicron variant waned after South African health officials said symptoms are mild to moderate. However, it appears to be more transmissible. During the U.S. session, USD/CAD recovers from some early session losses, rising to 1.2757 at the time of writing.

USD/CAD

MetaNews.

Global equity indices rise as concerns about the omicron variant of COVID-19 subside.

Market sentiment is positive, with European stock indexes recouping some of last week’s Friday losses. Despite tight liquidity conditions that exacerbated volatility across financial assets.

The dollar index, which had dipped below 96.00, is now up 0.28 percent at 96.36. Furthermore, as market sentiment improves, the yield on the 10-year US Treasury bond rose seven basis points to 1.557 percent. Though investors remain cautious as they await more information on the omicron variant.

Meanwhile, the U.S. crude oil benchmark Western Texas Intermediate (WTI), which has a strong correlation with the Canadian dollar, is trading at $72. Retracing nearly half of Friday’s drop sparked by COVID-19 fears.

The USD/CAD pair fell to 1.2715 in the overnight session. However the pair is still under pressure as investors focus on the severity of the disease that could be caused by the omicron COVID-19 variant.

However, market participants’ attention would be drawn to risk appetite. Macroeconomic data and central bank statements may affect the USD/CAD.

On Monday, the Canadian economic agenda released the third-quarter Current Account. Which increased by 1.37 billion, less than the 1.9 billion expected.

In terms of central bank speeches, Bank of Canada Governor Stephen Macklem will speak around 19:00 GMT, while Federal Reserve Chairman Jerome Powell will speak at 20:05 GMT.

USD/CAD price forecast.

The pair is consolidating above the hourly simple moving averages (HSMA) in the 1.2715-60 range, indicating a bullish bias in USD/CAD. Breaking the 1.2760 range high will reveal the November 26 high at 1.2798, 2 pips below the 1.2800 figure. The R1 daily pivot point at 1.2842, followed by the R2 daily pivot point at 1.2896, would be exposed if the latter was broken.

While the pivot point at 1.2743 is a first support level, the 50 and 100 SMAs at 1.2726 and 1.2701 are the second and third respectively.

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Michelle D. Madsen

Michelle D. Madsen graduated from the University of Westminster and has been deeply involved in the world of finance ever since. She has worked as a Broadcast Journalist hosting various news shows and informative webcasts about the financial markets. Since 2004 she has also been writing for Metanews daily, her attention to detail, and her in-depth knowledge of the financial markets have led her to cover Foreign Exchange and commodities. The world of finance has changed in the last few years with the introduction and rising popularity of cryptocurrencies. She has in no means been left behind, adding this to her bank of intellect and is now also an expert in cryptocurrencies. For the last ten years, Ms. Madsen has been engaged in the financial market. She has notedly written a great number of incredibly informative reviews for the crypto exchange and forex brokers. Her wealth of knowledge has enabled her to become a leading expert in the field. She continues to inform the public writing up-to-date, thorough reviews for the readers of Metanews as she has for the last decade.
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