USD/CAD finds support at 1.3350, posts small gains above 1.3380

• USD/CAD staged a rebound after dropping to 1.3350.
• US Dollar Index stays in the negative territory a little above 94.
• The trade deficit in the US widened to a record high of $82.94 billion.

The USD/CAD pair dropped to a daily low of 1.3350 on Tuesday but staged a rebound in the early American session. As of writing, the pair was up 0.12% on the day at 1.3388.

Falling crude oil prices hurt CAD on Tuesday

Earlier in the day, the selling pressure surrounding the greenback caused USD/CAD to push lower. After closing the first day of the week in the negative territory, the US Dollar Index (DXY) continued to edge lower toward 94.00 on Tuesday. In the absence of significant macroeconomic drivers, the DXY’s drop seemed to be the extension of the technical correction that started on Monday.

Meanwhile, the data published jointly by the US Census Bureau and the US Bureau of Economic Analysis revealed that the trade deficit in August widened to a record high of $82.94 billion in August. Nevertheless, this data had little to no impact on the USD’s performance against its rivals and the DXY was last seen 0.22% on the day at 94.06.

On the other hand, falling crude oil prices weighed on the commodity-related loonie and allowed USD/CAD to reverse its direction. At the moment, the barrel of West Texas Intermediate (WTI) is down 1.45% on the day at $39.95.

Later in the day, the Conference Board’s Consumer Confidence data will be watched closely by the market participants. Additionally, the first US presidential debate will take place in the early Asian session on Wednesday.

Technical levels to watch for