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  • USD/CAD rose to its highest level in more than a month on Tuesday.
  • US Dollar Index is consolidating Monday’s gains above 93.50.
  • WTI is retracing Monday’s losses, trades around $40.

The USD/CAD extended its rally during the first half of the day on Tuesday and touched its highest level in more than a week at 1.3346. However, the pair lost its bullish momentum ahead of the American session and was last seen posting small daily losses at 1.3297.

WTI rebound supports CAD

Crude oil prices suffered heavy losses on Monday amid demand concerns and the barrel of West Texas Intermediate lost more than 3%. With the market mood improving modestly, the WTI staged a rebound and was last seen gaining more than 1% on the day at $40.05, helping the commodity-sensitive loonie stay strong against its rivals.

On the other hand, the greenback seems to be having a difficult time preserving its strength as markets wait for FOMC Chairman Jerome Powell and US Treasury Secretary Mnuchin to testify before the House Financial Services Committee. Investors don’t expect Powell to deliver any surprising remarks on the policy outlook and will be looking for fresh insights into the next coronavirus aid bill.

A negative reaction in Wall Street’s main indexes could help the DXY regain its traction. Meanwhile, S&P 500 futures are posting modest gains on the day, pointing out to a moderately higher opening in US stocks. . 

The US Dollar Index, which gained 0.6% on Monday, is currently virtually unchanged on a daily basis at 93.55.

Technical levels to watch for