- Bullish Oil prices underpin Loonie and prompt some fresh selling on Tuesday.
- The USD preserves the overnight recovery gains and helped limit the downside.
- Market participants now eye US PPI print for some short-term trading impetus.
The USD/CAD pair held on the defensive through the early European session on Tuesday and is currently placed at the lower end of its daily trading range, around mid-1.3200s.
The pair failed to capitalize on the overnight attempted recovery from over three-month lows and met with some fresh supply on Tuesday amid a goodish pickup in Crude Oil prices, which tend to underpin demand for the commodity-linked currency – Loonie.
Oil prices rose around 1.0% on Tuesday amid improving global risk sentiment and remained supported by expectations that OPEC+ might support an extension of supply cuts when they meet in late June or early July to decide output policy for the rest of the year.
Meanwhile, the US Dollar managed to preserve the overnight recovery gains – led by the latest optimism over encouraging trade development and a solid rebound in the US Treasury bond yields, which might now help limit any further downside, at least for the time being.
It would now be interesting to see if the pair is able to find any buying interest at lower levels or the current slide marks the extension of the recent sharp downfall from five-month tops – levels beyond mid-1.3500s set on May 31.
Tuesday’s US economic docket highlights the release of Producer Price Index (PPI), which might influence the USD price dynamics and eventually produce some meaningful trading opportunities later during the early North-American session.
Technical levels to watch
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