USD/CAD Cannot Stop 8-Day Losses

The Canadian dollar keeps rallying versus its American counterpart, as it slid 0.27%. A mixed market mood keeps the CAD in the driver’s seat amid a firm US dollar. USD/CAD Price Forecast: Downward biased, threatening to break below 1.2450.

The USD/CAD pair post modest losses as Thursday North American session kicks in, after overnight’s a subdued session that witnessed the pair fluctuating in the 1.2550-80 range. At the time of writing, the USD/CAD is trading at 1.2525.

Market sentiment is currently mixed. European stocks fluctuate while US equities are gaining, except for the Russell 2000. The USD remains firm in the session, as the US dollar Index shows, barely up 0.08%, sitting at 98.685. US Treasury yields recover from Wednesday’s drop, led by the 10-year benchmark note at 2.357%, up three-and-half basis points.

The Russia-Ukraine conflict remains unchanged. Although of late, at press time, Barak Ravid Axio’s reported via Twitter that Ukrainian’s Chief of Staff Andriy Yermmak said there was progress in ceasefire negotiations with Russia. If that is achieved, the market sentiment will react positively to the news.

The NATO two-day summit in Brussels began. According to a senior US administration official, US President Biden told NATO that he supported increased NATO troops on the eastern front. Furthermore, the US has spoken with allies about assisting Ukraine in obtaining anti-ship missiles.

Aside from this, the US crude oil benchmark WTI falls almost 0.90% in the day, below the $113.50 mark, stopping Canadian dollar appreciation due to its correlation with oil prices.

The US economic docket featured Initial Jobless Claims for the week ending March 17, which fell to the lowest since 1969 as demand for labor far exceeds supply and rampant inflation keeps the incentive to work high.

Technically, the USD/CAD has been falling steadily for five consecutive days in chunks of 50-60 pips and is about to challenge September 3, 2021, support at 1.2493. Also, the USD/CAD broke below a five-month-old upslope trendline on Wednesday, exerting additional downward pressure on the pair.

The USD/CAD first support would be the 1.2500 figure. Once cleared, it would immediately test the 1.2493 level abovementioned, followed by the YTD low achieved on January 19 at 1.2450. Breach of the latter would open the door for a renewed test of October 21, 2021, at 1.2288.