USD/CAD edges higher above 1.2700 as US T-bond yields rise and oil prices slide By christianborjon USDCAD Majors Macroeconomics Technical Analysis
Falling oil prices weigh on the CAD
On Tuesday’s, Western Texas Intermediate , the US crude oil benchmark, falls more than 2%, as it moves beneath $90.00 per barrel. Alongsidefactors, the Canadian Trade Balance for December printed a deficit of C$0.14 billion when expectations were of a surplus of C$2.5 billion, hurt the prospects of the Loonie. Additionally, US T-bond yields skyrocketing in the session, led by the 10-year benchmark note reaching a daily high at 1.97%, boosted the greenback.
Fundamentally speaking, the narrative of the central banks’ worldwide tightening conditions keeps markets trendless. Money markets futures expectations of the Federal Reserve, analysts estimate five hikes to the Federal Funds Rates by the end of 2022. for January is expected at 7.3% while excluding volatile items like energy and food called Core CPI, which is foreseen at 5.5%.The USD/CAD is upward biased but faces resistance at the 50-day moving average at 1.2708.
However, once USD bulls reclaimed 1.2700, that would open the door for a test of the 50-DMA. A breach of the latter would expose the February 4 daily high at 1.2786. An upward break would send the USD/CAD higher towards the January 6 high at 1.2813.
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