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  • Loonie falls versus the US dollar despite sharp gains in crude oil.
  • USD/CAD holds a bearish tone, supported by 1.3240/50.

The USD/CAD pair spiked to 1.3282, reaching a fresh daily high. It is trading in positive territory for the day as the US dollar gains momentum across the board.

Earlier on Tuesday, USD/CAD fell to 1.3241, hitting the lowest intraday level in two weeks. From the low, it rebounded modestly and recently it gained impulse to the upside.

The dollar is up despite the rally in crude oil prices. The WTI barrel is rising by more than 3%, trading above $40.50. The loonie failed to benefit over the last hours from those gains.

Fed’s Chair Powell spoke at an event at the National Association for Business Economics. He said it is not the time to give priority to the budget deficit and added that too-little support to the economy could weaken the recovery. His words have no impact across markets amid lack of surprises.

The White House said US President Trump’s health is improving dramatically. Trump said he is looking forward to the next presidential debate on October 15th to be held in Miami.

In Wall Street, the Dow Jones is up marginally 0.07% while the Nasdaq drops 0.51%. US yields are higher on Tuesday supporting the greenback that is posting modest gains, still holding onto most of Monday’s losses.

Levels to watch

From a technical perspective, despite the rebound in USD/CAD, the bias continues to favor the downside. The dollar needs to climb above 1.3300 to alleviate the pressure.

On the flip side, a slide back below 1.3250 would increase the bearish pressure. Under 1.3240, the next strong support emerges at 1.3200.