- US Dollar Index turns flat near 96.30 as attention turns to midterm elections.
- Oil sell-off weighs on loonie on Tuesday.
The USD/CAD pair rose to a fresh 5-day high at 1.3145 on Tuesday as the commodity-sensitive struggled to find demand amid the ongoing crude oil sell-off. As markets shift their focus to midterm elections in the U.S., the pair stays quiet in the upper-half of its daily range. At the moment, the pair is up 0.2% on the day at 1.3135.
“Political pundits are as given to the market instinct for ‘talking one’s book’ as any hedge fund operator that ever cast a gimlet eye on an annual report. Expect to see much confusion today, innocent and otherwise, between analysis and opinion,” Joseph Trevisani, senior analyst at FXStreet, said.
Today’s data released by the IBD/TIPP today showed that economic optimism in the U.S. deteriorated in November. “Economic Optimism Index dipped from lofty levels at the start of November thanks to a lousy October for the Dow Jones and S&P 500 index, despite more good news about jobs and wage growth,” the IBD/TIPP said in its publication. Nonetheless, the US Dollar Index fluctuated in a tight range on Tuesday as investors stayed on the sidelines waiting for exit polls. As of writing, the DXY was virtually unchanged on the day at 96.30.
On the other hand, crude oil prices suffered losses for the seventh straight day on Tuesday with the barrel of West Texas Intermediate slumping to its lowest level in nearly 7 months at $61.30. Ahead of the API’s weekly crude oil stock report, the WTI is trading near the $62 handle in post-settlement, losing 0.9% on a daily basis.
Technical levels to consider
The initial resistance for the pair aligns at 1.3145 (daily high) ahead of 1.3170 (Oct. 31 high) and 1.3200 (psychological level). On the downside, supports are located at 1.3080 (20-DMA), 1.3015 (50-DMA) and 1.2990 (200-DMA).
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