Forex
Home›Forex›Major Pairs›USD/CAD rebounds but remains capped as risk aversion w…
USD/CAD rebounds but remains capped as risk aversion weighs on CAD
The Canadian dollar’s advance is limited by safer demand for the US dollar, even as oil prices rise on mounting Middle East tensions.
USD/CAD rebounded after trading as low as 1.3760 intraday, moving around 1.3790 and down 0.18% on the day, as risk aversion supported the US dollar and trimmed gains for the Canadian dollar. FXStreet cited escalating Middle East tensions as a key driver of investor caution, with prospects for a negotiated resolution fading.
The report said Iranian authorities threatened to target energy infrastructure across the Gulf, including US oil and gas interests, while Qatar called for efforts to reopen the Strait of Hormuz to avoid what it described as an industrial catastrophe. Those developments have also helped keep oil prices supported, which can buoy the loonie because crude oil is among Canada’s main exports.
Despite oil’s support, FXStreet noted foreign exchange trading was subdued as investors awaited the US CPI release on Friday, which could shape expectations for Federal Reserve policy and drive the next USD move.
On the technical front, USD/CAD held a near-term bearish tone by staying beneath resistance near 1.3805 and nearby moving averages. FXStreet pointed to the 100-period SMA around 1.3816 and the 200-period SMA near 1.3848 as caps, while support was flagged at 1.3760, where a break could extend weakness.
Latest closeWTI crude $90.70 ▲0.5%