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  • USD/CAD is rising for the second straight day on Tuesday.
  • US Dollar Index continues to push higher above 93.00.
  • Sharp decline witnessed in crude oil prices weighs on CAD.

The USD/CAD pair started the new week on a strong footing and closed in the positive territory on Monday as falling crude oil prices weighed on the loonie. The pair extended its rally on Tuesday and touched its highest level in two weeks at 1.3178. As of writing, USD/CAD was up 0.53% on the day at 1.3170.

Oil selloff intensifies

The barrel of West Texas Intermediate (WTI) closed the fourth straight trading day in the negative territory on Monday and struggled to shake off the selling pressure. The risk-averse market environment amid the heightened US-China geopolitical tensions dragged the WTI to its lowest level in More than two months at $36.95. At the moment, the WTI is down 4% on a daily basis at $37.50.

On the other hand, the USD is capitalizing on safe-haven flows and provide an additional boost to the pair. 

The US Dollar Index, which gained nearly 1% after slumping to its worst level in more than two years at 91.75 last week, was last seen gaining 0.2% at 93.25. The IBD/TIPP Economic Optimism Index and Consumer Credit Change data will be featured in the US economic docket.

Meanwhile, US stock index futures are suffering heavy losses ahead of Wall Street’s opening bell, suggesting that the USD could continue to find demand as a safer alternative and help USD/CAD push higher in the second half of the day. 

Technical levels to watch for