- WTI gains more than 1% on the day as tension in the Middle East escalates.
- US Dollar Index moves sideways in a tight range below 97.50.
- Today’s data from the U.S. unlikely to trigger a significant market reaction.
The USD/CAD pair came under modest selling pressure in the last hour and touched a fresh session low of 1.3454 as the commodity-sensitive loonie gathered strength on the back of rising crude oil prices. Nevertheless, the pair seems to be struggling to gain momentum and was last down 0.12% on the day at 1.3460.
Reports of two unidentified drones attacking two oil-pumping stations owned by Saudi Aramco suggest that the tension in the Middle East remains elevated, causing concerns over supply disruptions and boosting crude oil prices. As of writing, the barrel of West Texas Intermediate is up 1.45% on a daily basis at $61.70. Later in the day, the API’s weekly crude oil stock report will be watched closely by investors.
On the other hand, the greenback is staying relatively calm following Monday’s sharp fluctuations as investors opt out to stay on the sidelines while waiting for the next development surrounding the U.S.-China trade conflict. Earlier in the session, President Trump tweeted out that they will make a deal with China when the time is right and claimed that it would happen “much faster than people think.”
Ahead of the import/export price index data, the US Dollar Index is staying virtually unchanged on a daily basis a little above 97.30. There won’t be any macroeconomic data releases from Canada.
Technical levels to watch for
The pair could face the initial resistance at 1.3500 (psychological level) ahead of 1.3520 (Apr. 24 high) and 1.3600 (Dec. 21, 2018, high). On the downside, supports are located at 1.3450 (daily low), 1.3400 (50-DMA) and 1.3345 (Apr. 23 low).
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