- Both manufacturing sales wholesale sales decline in Canada.
- US Dollar Index preserves strength in the early NA session.
- WTI continues to erase last week’s gains.
The USD/CAD pair gained traction in the last hour as the dismal macroeconomic data releases forced the loonie to weaken against its major rivals. As of writing, the pair was up 0.38 on the day at 1.3340.
According to the monthly report published by Statistics Canada, manufacturing sales in Canada decreased by 1.4% on a monthly basis in November following October’s 0.1% decline. Furthermore, wholesale sales dropped 1% in the same period to miss the market expectation for a no-change. Additionally, the barrel of West Texas Intermediate erased nearly 2% on Tuesday and fell below $53 to further weigh on the commodity-sensitive loonie.
Meanwhile, despite a more-than-1% drop in the 10-year U.S. T-bond yield, the greenback stays strong on Tuesday as investors are waiting for fresh headlines on the U.S. government shutdown. The only data release from the U.S. in the remainder of the day will be the existing home sales, which is expected to decline by 1.2% in December. At the moment, the DXY is up 0.11% on the day at 96.43.
Technical levels to consider
The initial resistance for the pair aligns at 1.3385 (50-DMA) ahead of 1.3420 (Dec. 17, 2018, high) and 1.3500 (psychological level/Dec. 18, 2018, high). On the downside, supports could be seen at 1.3300 (daily low), 1.3230 (Jan. 18 low) and 1.3180 (Jan. 9 low).
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