- USD/CAD bounces in sync with the US dollar amid quiet trading.
- Consolidation in WTI fails to offer support to the CAD bulls.
- Hurricane Laura updates and Fed Powell’s speech in focus.
The USD/CAD pair sees a range breakout above the 1.3150 level, having consolidated below the latter for the most part of the Asian session this Thursday.
The spot found support at 1.3130 on a couple of occasions, which prompted a bounce-back above the midpoint of the 1.31 handle.
The fresh leg up in the major can be attributed to a broad-based US dollar rebound, as the US Treasury yields recover losses after the overnight slump. The greenback also draws support from the upbeat US Durable Goods data while a cautious market mood ahead of the crucial Fed Chair Jerome Powell’s speech also lifts the haven bids for the buck.
Meanwhile, a phase of consolidation seen in the US oil (WTI) fails to cheer the CAD bulls, collaborating with the pair’s bounce. WTI rose to fresh five-month highs of $43.77 on Wednesday on reports that the alert for Hurricane Laura is raised to Category 4 while anticipating that the storm could surpass Hurricane Katrina that occurred in 2015.
Looking ahead, the upside in the spot appears elusive, as the dovish Fed expectations combined with growing concerns over Hurricane Laura will drag the black gold lower. Powell is widely expected to hint at adopting a new monetary policy framework to boost the inflationary pressures, which could render dollar negative.
WTI prices could resume its rally, as the US National Hurricane Center (NHC) cautions that the extremely dangerous Hurricane Laura makes landfall near Cameron Louisiana.
USD/CAD Technical levels
“A clear break of 1.3130 signals the pair’s drop to 1.3015, considering the difference between the extreme low and high marked within the pattern, January 09 high near 1.3100 may offer intermediate halt during the fall. On the flipside, 1.3160 and 1.3200 can entertain the short-term buyers, if any, ahead of challenging the sentiment by 100-bar SMA level near 1.3245,” FXStreet’s Analyst Anil Panchal explained.
USD/CAD Additional levels
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