- USD/CAD staged a rebound after testing 1.3500 on Tuesday.
- Rising crude oil prices help CAD stay resilient against its rivals.
- US Dollar Index stays in the red below 97.00 ahead of mid-tier data.
After dropping toward 1.3500 during the early trading hours of the Asian session, the USD/CAD rose decisively and gained more than 50 pips in less than an hour. However, the pair met resistance at 1.3570 and erased its daily gains. As of writing, USD/CAD was trading at 1.3525, up 0.05% on a daily basis.
CAD struggles to capitalize on rallying oil prices
Sharp shifts witnessed in market sentiment on Tuesday caused the pair to fluctuate wildly. White House trade adviser Peter Navarro said the US trade deal with China was over to trigger an intense flight-to-safety. However, US President Donald Trump quickly responded to this claim by saying that the trade deal was “fully intact” and allowed investors to take a sigh of relief.
Meanwhile, the market mood remains upbeat during the European session with major European equity indexes posting impressive gains. Moreover, the barrel of West Texas Intermediate (WTI) is up 2.1% on the day at $41.40. Despite these developments, the loonie seems to be having a tough time gathering strength.
Bloomberg in a report claimed that the US was planning to announced tariffs on aluminium imports from Canada toward the end of the week and weighed on the CAD.
Later in the day, the IHS Markit’s preliminary Manufacturing and Services PMI and New Home Sales data from the US will be looked upon for fresh impetus. Ahead of these data, the US Dollar Index is down 0.1% on the day at 96.90.
Technical levels to watch for
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