USD/CAD edges lower toward 1.33 as oil gathers momentum

The USD/CAD pair closed the previous day slightly below the 1.3350 handle and stayed under modest selling pressure on Tuesday as the commodity-sensitive loonie continued to gather strength on rising crude oil prices. At the moment, the pair is down 0.13% on the day at 1.3317.

After adding 1% on Monday, the barrel of West Texas Intermediate preserved its bullish momentum and rose to its highest level since the first week of November 2018 at $59.41. As of writing, the WTI was trading a few cents below that level, rising 0.75% on a daily basis. Later in the session, the weekly API oil stock report from the U.S. could impact crude oil prices in the post-settlement trade.  

On the other hand, the greenback continues to have a hard time attracting investors ahead of tomorrow’s critical FOMC meeting, at which the updated dot plot will be looked upon for fresh clues regarding the number of rate hikes governing council members expect to see. The U.S. economic docket won’t be offering any significant data releases today and the US Dollar Index was last seen losing 0.18% on the day at 96.35.

Technical levels to consider

The pair could face the first support at 1.3300 (Mar. 18 low) ahead of 1.3260 (50-DMA) and 1.3190 (200-DMA). On the upside, resistances are located at 1.3345 (daily high), 1.3420 (Mar. 12 high) and 1.3500 (psychological level).

• WTI advances to fresh 2019 highs on Tuesday.
• Greenback struggles to find demand ahead of FOMC meeting.
• US Dollar Index drops below 96.50 area.