The US Dollar is trading at 1.2706 against the Canadian Dollar today, down -0.46% with a YTD return of -0.02%. The pair’s open rate was 1.2735 the same as the previous close. USD/CAD will have a daily range between 1.26 and 1.27, the 52-week range is expected to stay between 1.26 and 1.46.
Joe Biden’s Inauguration ceremony today has traders “considering the absence of oversold RSI conditions” which is likely to gear USD/CAD in a “triangle bullish chart pattern while also staying below 200-bar SMA” according to FX Street.
After dropping from an exchange rate of 1.2774 at the beginning of last week to 1.2648 in the mid-week, USD/CAD surged again at the start of this week reaching 1.2772 but has been losing momentum which is keeping bulls on their toes, watching to see if Biden’s transition into the White House will cause market volatility.
Increasing Treasury yields will also impact the currency pair, but Daily FX reported that “defending the 8-day and 20-day simple moving averages could recharge US Dollar bulls and motivate a push toward technical resistance near the 38.2 Fibonacci retracements.”
Looking at US Dollar implied volatility readings, USD/CAD market action is anticipated to be one of the most active currency pairs during Wednesday’s trading session. The overnight implied volatility of USD/CAD “jumped to 8.2%, which is above its 20-day average reading of 6.7% and ranks in the top 70th percentile of readings over the last 12-months.”
The Bank of Canada interest rate decision is expected to be made today which will also impact the volatility of USD/CAD as this week progresses.
By Surina Nath