- The USD stood tall near multi-week tops and helped regain traction.
- Sliding oil prices undermined the Loonie and remained supportive.
- Traders now eye US CPI, Powell’s testimony for a fresh impetus.
The greenback buying interest picked up some additional pace in the last hour and lifted the USD/CAD pair back above mid-1.3200s, or fresh one-month tops.
Following the previous session’s intraday pullback, the pair managed to catch some fresh bids on Tuesday and built on its recent bullish momentum for the fourth consecutive session – also marking its seventh day of a positive move in the previous eight.
Stronger USD, weaker oil remain supportive
As investors waited for fresh trade updates, the US Dollar stood tall near multi-week tops amid a modest pickup in the US Treasury bond yields and was seen as one of the key factors driving the pair higher through the early European session on Tuesday.
This coupled with a weaker tone around crude oil prices, now down around 0.75% for the day, further undermined demand for commodity-linked currency – Loonie and remained supportive of the pair’s move up to the highest level since October 11.
Oil prices on Wednesday were weighed down by fading optimism over a partial US-China trade deal, especially after the US President Donald Trump’s overnight comments that the US will increase tariffs on China if the first step of a broader agreement isn’t reached.
It will now be interesting to see if the pair is able to capitalize on the positive momentum or faces some resistance near the very important 200-day SMA as the focus now shifts to Wednesday’s important release of the latest US consumer inflation figures for October.
This will be followed by the Fed Chair Jerome Powell’s testimony, which will play a key role in influencing the near-term USD price dynamics and help investors to determine the pair’s next leg of a directional move.
Technical levels to watch
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