Search ForexCrunch
  • The USD remained well supported near multi-year tops despite a pullback in the US bond yields.
  • A sharp intraday slump in Oil prices undermined Loonie and remained supportive of the up-move.
  • Investors look forward to the US ISM PMI in order to grab some short-term trading opportunities.

The USD/CAD pair continued scaling higher through the early North-American session on Tuesday and is currently placed at session tops, around the 1.3375-80 region.
A combination of supporting factors helped the pair to regain positive traction on Tuesday and find acceptance beyond the 1.3345 heavy supply zone, which acted as a key barrier through the month of August.

Stronger USD/weaker Oil prices fueling the up-move

Despite a modest pullback in the US Treasury bond yields, the US Dollar stood tall near multi-year tops – amid the ongoing slump in the European currencies – and was seen as one of the key factors driving the pair higher.
This coupled with a slump in Crude Oil prices, now down over 3% for the day, weighed heavily on the commodity-linked currency – Loonie and remained supportive of the pair’s momentum to the highest level since June 18.
Meanwhile, possibilities of some short-term trading stops being triggered on a sustained move beyond mid-1.3300s, leading to some technical buying further seemed to have collaborated to the pair’s strong bid tone on Tuesday.
It would now be interesting to see if the pair is able to capitalize on the bullish move or faces some resistance at higher levels as the focus now shifts to the US economic docket – featuring the release of ISM manufacturing PMI.

Technical levels to watch