- Wholesale sales in Canada disappoint.
- WTI recovery loses steam on Tuesday.
- US Dollar Index recovers to 95.70 in the early NA session.
The USD/CAD pair extended its losses and touched its lowest level in 12 days at 1.3015 before gaining traction in the early NA session. At the moment, the pair is trading at 1.3036, down only 10 pips on the day.
The data from Canada on Tuesday showed that wholesale sales contracted by 0.8% in June following May’s 0.9% growth and missed the analysts estimate of a 0.8% increase by a wide margin. “The motor vehicle and parts and the miscellaneous subsectors contributed the most to the decline,” Statistics Canada noted to unveil the negative impact of the U.S. tariffs.
Meanwhile, crude oil failed to extend its recovery and the barrel of West Texas Intermediate erased the majority of its gains from Monday to put some additional selling pressure on the commodity-sensitive loonie. At the moment, the barrel of WTI is losing 55 cents on the day at $66.05.
On the other hand, the US Dollar Index, which suffered heavy losses on US President Trump’s comments regarding his disapproval of the Fed’s decision to hike rates, started to retrace its losses and turned flat on the day near 96.70 in the last hour. There won’t be any macroeconomic data releases from the United States in the remainder of the day and the greenback’s market valuation is likely to stay as the primary driver of the pair’s price action.
Technical levels to consider
With a daily close below 1.3035 (100-DMA) the pair could fall toward 1.3000 (psychological level) and 1.2960 (Aug. 7 low). On the upside, resistances align at 1.3060 (20-DMA), 1.3115 (50-DMA) and 1.3175 (Aug. 16 high).
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