By Ketki Saxena
Investing.com -- The Canadian dollar weakened against its US counterpart today, pressured by risk appetite as markets digest the higher-for-longer narrative from the US Federal Reserve, and as Treasury yields stayed near their highest level in 16 years.
Meanwhile, the safe haven greenback rallied across the board, holding at its highest level since November against a basket of major currencies.
“The Canadian dollar was not going to be able to swim against the tide of a stronger U.S. dollar for very long,” noted Michael Goshko, senior market analyst at Convera Canada ULC.
“You are talking about a dollar that’s been super strong now for almost two months, plus you have risk (appetite) rolling over.”
Even an uptick in crude prices could not help the commodity-linked loonie eke out a gain against the greenback as the dollar-dominated.
On a technical level for the pair, analysts at Daily FX note, "Looking at the daily timeframe there are many hurdles on the downside with support offered by both the 100 and 200-day MAs. A breach of these support areas may bring a retest of support around the 1.3250 handle into play."
"Looking at the upside potential for the pair and immediate resistance rests at 1.3540 which is the 20-day MA while a move higher brings key resistance at 1.3650 into focus."
Looking ahead for the USD/CAD pair, analysts at Monex have their eyes on Canadian July GDP data due Friday. "We anticipate an upside growth surprise vs. expectations for a 0.1% print that should boost BoC hike expectations over 50% for October and support CAD. Until then, however, the loonie will be at the mercy of global developments."