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  • Crude oil gained traction in the last hour with the WTI adding more than 1%.
  • US Dollar Index spends second half of the day in tight range above 98.
  • Coming up on Wednesday: FOMC policy announcements and Canada GDP data.  

After advancing toward the 1.32 area earlier in the day, the USD/CAD pair reversed its course in the last hour and retraced all of its daily gains with the commodity-sensitive Loonie finding demand on the back sharply rising crude oil prices. As of writing, the pair was down 0.05% on a daily basis at 1.3155.

Following yesterday’s 1.5% gain, the barrel of West Texas Intermediate pushed higher today and was seen trading within a touching distance of the $58 mark, adding 1.4 on the day. Although there were no apparent catalysts behind crude oil’s upsurge, heightened tensions in the Middle East and the market expectation of yet another draw in the US crude oil stocks in today’s API data seem to be supporting today’s price action.

US Dollar Index stays in upper-half of this week’s range

Earlier today, the data published by the US Bureau of Economic Analysis (BEA) showed that the core Personal Consumption Expenditures (PCE) Price Index rose to 1.6% on a yearly basis in June and remained below the Fed’s target of 2%. Other data from the US revealed that the consumer sentiment improved in July with the Conference Board Confidence Index rising to  135.7 from 121.5, coming in slightly below the 18-year high of 137.9 recorded back in October 2018. The US Dollar Index rose to its best level in two months at 98.21 but struggled to preserve its momentum with investors shifting their attention to the FOMC meeting.

Also on Wednesday, Statistics Canada will release the economic growth figures for May. Previewing the data, TD Securities analysts said that the industry-level gross domestic product (GDP) growth was seen easing to 0.2% on a monthly basis in May following last two months’ strong performance.

Technical levels to watch for