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  • USD/CAD extended its daily slide in early American session.
  • US Dollar Index erases early gains, drops below 93.50.
  • WTI climbs above $42 and provides additional boost to CAD.

The USD/CAD pair spent the first half of the day fluctuating in a tight range below 1.3400 and came under renewed bearish pressure in the early American session. After slumping to a daily low of 1.3332, the pair staged a modest rebound and was last seen losing 0.28% on the day at 1.3345.

DXY loses traction 

The upbeat market mood, as reflected by early gains witnessed in Wall Street’s main indexes, seems to be weighing on the greenback. At the moment, the US Dollar Index is flat on the day at 93.39. Meanwhile, the only data from the US revealed on Monday that JOLTS Job Openings increased by 518,000 to 5.9 million in June. With this reading coming in better than the market expectation of 4.9 million, the bearish pressure on the USD remains intact.

On the other hand, crude oil prices also seem to be capitalizing on risk-on flows in the second half of the day. At the moment, the barrel of West Texas Intermediate is trading near $42, gaining 1% on the day to help the commodity-related loonie stay strong against its rivals.

The next high-impact data for the pair will be the inflation report from the US on Wednesday. Analysts expect the core Consumer Price Index to stay unchanged at 1.2% on a yearly basis in July. A lower-than-expected reading could confirm the disinflationary impact of the COVID-19 outbreak on the US economy and cause the USD to lose strength.

Technical levels to watch for