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  • The USD remains supported by tempered Fed rate cut expectations.
  • Weaker Oil prices undermine Loonie and provided an additional boost.
  • The focus now shifts to the Fed Chair Jerome Powell’s scheduled speech.

The Canadian Dollar held on the defensive against its American counterpart, lifting the USD/CAD pair further beyond the 1.3100 handle and back closer to the post-NFP swing high.

A combination of supporting factors –  including the prevalent US Dollar buying interest and weaker Oil prices, helped the pair to built on the overnight bounce from mid-1.3000s and continue gaining positive traction for the third consecutive session on Tuesday.

The greenback traded near three-week tops amid tempered Fed rate cut expectations, while concerns over slowing global economic growth weighed on Crude Oil prices and undermined demand for the commodity-linked currency – Loonie.  

It, however, remains to be seen if the pair is able to capitalize on the positive momentum or once again fizzles out at higher levels as the focus now shifts to the Fed Chair Jerome Powell’s public appearance later during the early North-American session.  

This will be followed by Powell’s two-day Congressional testimony on Wednesday and Thursday, which along with the latest US consumer inflation figures might further collaborate towards providing a fresh directional impetus for the major.

Technical levels to watch