- Weaker oil prices undermined Loonie and helped regain traction.
- The USD climbs to fresh multi-year tops and remained supportive.
- Traders now eye US ISM manufacturing PMI for a fresh impetus.
The USD/CAD pair held on to its positive tone through the early European session and is currently placed near 2-1/2 month tops set in the previous session.
After the overnight late pullback, a combination of supporting factors helped the pair to regain some positive traction on Tuesday and find acceptance above the 1.3345 heavy supply zone, at least for now.
The US Dollar climbed to fresh multi-year tops, further beyond the 99.00 handle, amid renewed hopes of a potential US-China trade deal, though a modest pullback in the US Treasury bond yields capped the upside.
Fall in Oil prices weighed on Loonie
Adding to this, a negative trading mood around Crude Oil prices undermined demand for the commodity-linked currency – Loonie – and further collaborated to the pair’s bid tone for the third consecutive session.
Oil prices fell on Tuesday on the back of growing market worries about the global economic growth and a rise in OPEC output, rising for the first time this year in August in the wake of higher supply from Iraq and Nigeria.
It would now be interesting to see if bulls are able to capitalize on the latest bullish breakout as the focus now shifts to the US economic docket, highlighting the release of ISM manufacturing PMI, for some fresh impetus.
Technical levels to watch
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