- WTI loses its momentum before breaking above the $70 mark.
- US Dollar Index finds support near 95.
The USD/CAD pair dropped to its lowest level since mid-June at 1.2960 on Tuesday but gained traction in the last couple of hours as the commodity-sensitive weakened on falling crude oil prices. As of writing, the pair was trading at 1.2990, losing 0.1% on the day.
Earlier today, boosted by an improved market sentiment, the barrel of West Texas Intermediate rose to a daily high at $69.80. However, after White House National Security Advisor Bolton announced that the U.S. was looking to impose additional sanctions on Iran. The WTI erased the majority of its daily gains and fell to $68.15, making it difficult for the CAD to preserve its strength. The WTI is trading at $69.40 at the moment, still up 0.75% on the day.
Meanwhile, after easing to the 95 mark, the US Dollar Index gained traction and retraced some of its losses to help the pair continue to recover its downside. At the moment, the US Dollar Index is down 0.25% on the day at 95.12.
The data from Canada on Tuesday showed that Ivey Purchasing Managers Index in July slumped to 61.8 in July from June’s 63.1 reading and fell short of the market expectation of 64.2. On the other hand, JOLTS Job Openings rose to 6.662 million in June from 6.659 million in May.
Technical outlook
With a decisive break above the 1.30 mark, the pair could extend its upside to 1.3080 (20-DMA) and 1.3140 (50-DMA). On the downside, supports are located at 1.2985 (100-DMA), 1.2920 (Jun. 8 low) and 1.2835 (May 0 low).
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