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  • USD/CAD continues to trade below 1.3000 on Tuesday.
  • WTI clings to modest daily gains above $45.
  • US Dollar Index stays in the negative territory below 92.00.

The USD/CAD pair closed the first day of the week with small gains at 1.3000 but started to edge lower on Tuesday. After touching a daily low of 1.2941, the pair recovered modestly and was last seen trading at 1.2980, losing 0.15% on the day.

WTI rebound supports CAD on Tuesday

The poor performance of crude oil prices at the start of the week made it difficult for the commodity-related loonie to stay resilient against its peers. OPEC members reached an agreement to extend the oil output cuts by three months but failed to convince non-OPEC producers on Monday and the barrel of West Texas Intermediate lost more than 1%. With additional meetings taking place on Tuesday and investors turning optimistic for a deal, the WTI is currently posting modest daily gains at $45.25 and helping the CAD find demand.

On the other hand, the greenback remains on the back foot as risk flows continue to dominate financial markets. Reflecting the upbeat market mood, the S&P 500 Futures are up more than 1% on the day and the US Dollar Index is down 0.1% at 91.77.

On Tuesday, Statistics Canada will release the third-quarter GDP growth data, which is expected to show that the economy has expanded by 47.6% on a yearly basis. Later in the session, the IHS Markit will publish the Manufacturing PMI reports for both the US and Canada. Finally, the ISM Manufacturing PMI and Construction Spending will be featured in the US economic docket as well.

Technical levels to watch for