USD/CAD steadies below 1.3900 despite falling crude oil prices

• USD/CAD fell to its lowest level in more than two weeks.
• Broad-based USD weakness allows the bearish pressure on the pair to remain intact.
• Falling crude oil prices help USD/CAD limit losses for the time being.

The USD/CAD pair extended its slide on Tuesday and touched its lowest level since the last day of April at 1.3872. As of writing, the pair was down 0.38% on a daily basis at 1.3881.

USD remains on the back foot

The broad-based selling pressure surrounding the greenback seems to be allowing the pair to push lower for the second straight day. After dropping 0.75% on Monday, the US Dollar Index (DXY) failed to stage a rebound amid a lack of fresh fundamental drivers. At the moment, the index is at fresh weekly lows near 99.30, losing 0.3% on the day.

The monthly data published by the US Census Bureau revealed that Housing Starts and Building Permits fell by 30.2% and 20.8%, respectively, but was ignored by the market participants.

Meanwhile, during his testimony before the Senate Banking Committee, FOMC Chairman Jerome Powell reiterated that the Fed remains committed to supporting the economy. Furthermore, US Treasury Secretary Steven Mnuchin noted that economic conditions were expected to improve in the third and fourth quarters. 

On the other hand, the barrel of West Texas Intermediate (WTI), which gained more than 20% in the last three trading days, made a technical correction on Tuesday. With the WTI trading a little below $32 with a daily loss of 1.5%, the commodity-sensitive loonie struggled to preserve its strength against the USD and limited USD/CAD’s downside.

On Wednesday, the Consumer Price Index data from Canada will be watched closely by the market participants. Later in the day, the FOMC will release the minutes of its April 28-29 meeting. 

Technical levels to watch for