USD/CAD plummets to 6-week lows near 1.3030 as USD loses ground

• US Dollar Index drops to fresh daily low at 94.30 as Trump-Juncker meeting goes underway.
• USD/CAD slumps to its lowest level since mid-June at 1.3030.
• WTI sticks to daily gains above $69 after EIA report.

The USD/CAD pair met a fresh bearish pressure in the US afternoon and fell to its lowest level since June 14 at 1.3030. As of writing, the pair was trading at 1.3050 down 105 pips, or 0.8%, on the day.

This recent drop seems to be the product of  a broad-based selling interest surrounding the greenback. Although it wasn’t clear what triggered that sell-off, it seems as if markets are pricing a negative outcome from the Trump-Juncker summit. In fact, there are now market rumors floating around about Juncker not willing to reach any type of a deal at today’s meeting. Speaking to reporters ahead of the meeting, Juncker said that they needed to reduce tariffs rather than increasing them and Trump stated that they were looking to “have a good trade deal.”

In the meantime, crude oil’s performance on Wednesday seems to be helping the loonie  find even more demand from the markets. After today’s EIA report showed that crude oil stocks in the U.S. fell more than expected last week, the barrel of WTI rose to its highest level since last Thursday at $69.66. At the moment, WTI is trading at $69.24, up 50 cents on the day.

Technical outlook

1.3030 (daily low) now aligns as an interim support ahead of 1.3000 (psychological level) and 1.2960 (100-DMA). On the upside, resistances could be seen at 1.3125 (50-DMA), 1.3190 (Jul. 24 high) and 1.3225 (Jul. 2/Jul. 7/Jul. 11 high).