- US Dollar Index looks to close the day in the positive territory near mid-95s.
- WTI trades around $75 per barrel ahead of API report.
- Fitch says new NAFTA settles key trade uncertainties.
After recording its lowest daily close since late May at 1.2780 with the loonie gathering strength on oil rally and the new NAFTA agreement, the USD/CAD pair stayed relatively quiet on Tuesday and was last seen trading flat on the day at 1.2815.
Today’s subdued trading action reflects the lack of significant fundamental drivers. Today’s data from the U.S. showed that the ISM NY Business Conditions Index edged down to 72.5 in September from 76.5 in August. Moreover, in a speech delivered in Boston, FOMC Chairman Jerome Powell reiterated that gradual rate hikes would allow them to “balance the inevitable risks that come with extraordinary times, so as to extend the current expansion, while maintaining maximum employment and low and stable inflation.” Following a rally to a fresh monthly high at 95.74, the US Dollar Index went into a consolidation phase in the second half of the day and was last seen at 95.50, where it was up 0.2% on a daily basis.
In the meantime, the barrel of West Texas Intermediate, which advanced to its highest level since November 2014 at $75.88, is also moving sideways near $75 and failing to provide any directional clues as investors are waiting for the API’s weekly crude oil inventory report.
Technical outlook
The RSI indicator on the daily chart continues to stay above the 30 mark, suggesting that the pair could push lower before making a technical correction. On the downside, supports could be seen at 1.2780 (Oct. 1 low), 1.2730 (May 11 low) and 1.2690 (Apr. 9 low). Resistances, on the other hand, align at 1.2850 (50-WMA), 1.2950 (200-DMA) and 1.3000 (psychological level).
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