- USD/CAD grinds higher around the monthly top, sidelined of late.
- Oil prices cheer energy crisis, receding hawkish hopes from the Fed.
- Labor Day holiday in the US, Canada trouble the pair traders.
- BOC, Canadian GDP will be crucial for short-term directions.
USD/CAD remains on the front foot at around 1.3150 as buyers regain control, after the first negative day in four. In doing so, the Loonie pair pays a little heed to the firmer prices of Canada’s main export item, WTI crude oil, during early Monday morning in Europe.
WTI crude oil prices increase 1.9% daily to $88.50 by the press time. In doing so, the black gold appreciates the weekend headlines that intensified recession fears in the Eurozone. The same also signaled lesser oil output from Russia and a lack of the US-Iran deal that might have released oil from Tehran to ease the global energy supply crunch.
Elsewhere, the market sentiment remains sluggish as the reduction in the hawkish Fed bets, around 57% by the press time from above 70% in the last week, seems to probe the US dollar bulls. Even so, the market’s fears of recession and the Fed’s aggression helped the US Dollar Index (DXY) to refresh the 20-year high earlier in the day, up 0.45% intraday near 110.10 at the latest.
Other than the economic slowdown fears, the Sino-American jitters over the Trump-era sanctions and Taiwan also exert downside pressure on the market sentiment and help the USD/CAD pair to remain firmer.
While portraying the mood, the US stock futures remain sidelined but those from Europe print losses. It’s worth noting that the Labor Day holiday in the US and Canada restricts market moves and could challenge the USD/CAD traders. That said, the Bank of Canada (BOC) monetary policy meeting, the second quarter (Q2) Canadian Gross Domestic Product (GDP) data and the ISM Services PMI for August are crucial catalysts for the pair traders to watch for clear directions.
Given the comparatively more hawkish Fed than the BOC, the anticipated 0.75% from the latter could only offer a kneejerk reaction unless surprising the markets.
Unless providing a daily closing below the three-week-old support line, near 1.3010 by the press time, USD/CAD remain on the way to cross the immediate hurdle around 1.3170, comprising an upward sloping resistance line from late December 2021.
Additional important levels
|Today last price||1.3154|
|Today Daily Change||0.0022|
|Today Daily Change %||0.17%|
|Today daily open||1.3132|