- WTI recovers to $72 to support the loonie on Tuesday.
- US Dollar Index stays quiet above 95.
- USD/CAD remains on track to end the second straight day in the red.
The USD/CAD pair extended its losses for the second day in a row on Tuesday as rising crude oil prices continued to support the commodity-sensitive loonie. As of writing, the pair was trading at 1.2935, losing 0.45% on the day.
After suffering heavy losses in the second half of the previous week, the barrel of WTI found support near $70.50 and started to retrace last week’s losses. Ahead of the weekly API stock report, the WTI was trading at $71.95, adding 0.3% on a daily basis.
On the other hand, the US Dollar Index, which fell to its lowest level since September 27 at 94.70 earlier in the NA session, gained traction after the U.S. Bureau of Labor Statistics announced that the job opening rose to a new record high of 7.1 million to remind investors of the tight labour market conditions. With markets’ attention shifting to the FOMC minutes that is scheduled to be published on Wednesday, the DXY went into a consolidation phase and was last seen moving sideways in the 95.05-10 area, where it started the day.
A separate report released by the Fed today showed industrial production increased 0.3% in September following August’s 0.4% reading. Commenting on the data, “Factory production is a leading indicator for the overall U.S. economy and its widespread acceleration in the third quarter bodes well for growth in the balance of this year and into next,” FXStreet Senior Analyst Joseph Trevisani said.
Technical levels to consider
On the downside, the first support for the pair could be seen at 1.2915 (daily low) ahead of 1.2855 (Oct. 4 low) and 1.2780 (Oct. 1 low). Resistances align at 1.2970 (200-DMA), 1.3000 (psychological level) and 1.3065 (100-DMA).
Share
