- WTI stages a modest recovery to help loonie earlier in the day.
- A renewed selling pressure on crude oil weighs on CAD.
- US Dollar Index corrects the latest rally on Tuesday.
After recording its highest daily close in nearly four months yesterday, the USD/CAD pair came under pressure during the first half of the day and fell to 1.3215 area as crude oil recovery helped the commodity-sensitive loonie gather strength. However, with the West Texas Intermediate reversing its course in the last hours, the pair gained traction and erased its daily losses. As of writing, the pair was virtually unchanged on the day at 1.3245.
Although reports of OPEC+ planning to bring in additional supply cuts allowed crude oil prices to rise on Monday, US President Trump’s opposition to supply reduction didn’t allow the recovery move to deepen. In its monthly oil market report today, OPEC announced that it revised its demand forecast by 250,000 barrels per day in 2019 and said that it was expecting the excess supply to widen in 2019 to drag prices lower. At the moment, the barrel of West Texas Intermediate is losing 30 cents on the day at $58.55.
On the other hand, the greenback, which took advantage of the selling pressure surrounding the euro and the British pound yesterday, failed to extends its rally to limit the pair’s upside. As of writing, the DXY was down 0.37% on the day at 97.27.
Technical levels to consider
The pair could face the first technical resistance at 1.3225 (Sep. 6 high) ahead of 1.3290 (Jul. 19 high) and 1.3335 (Jun. 21 low). On the downside, supports are located at 1.3130 (20-DMA), 1.3045 (100-DMA) and 1.2990 (200-DMA).
Share
