USD/CAD struggles near 1-week lows, bears await a break below 1.3200 mark

• The USD remained depressed amid renewed US-China trade uncertainty.
• Weaker oil prices undermined the loonie and helped limit the downside.

The USD/CAD pair was seen oscillating in a narrow trading band through the early European session on Tuesday, with bears awaiting a sustained break below the 1.3200 handle.
 
The pair lacked any firm directional bias on Tuesday and consolidated the recent sharp pullback from one-month tops. A combination of diverging forces failed to provide any meaningful impetus and lead to a subdued/range-bound price action.

Weaker oil prices offset trade uncertainty

The US dollar remained depressed amid receding hopes for a preliminary US-China trade deal. In the latest trade-related development, CNBC reported on Monday that Chinese officials are pessimistic that a trade deal will be signed with the United States.
 
The report, which cited government sources, said the bleak outlook was due to the US President Donald Trump’s reluctance to roll back tariffs and weighed on the USD, albeit a modest uptick in the US Treasury bond yields helped limit the downside.
 
Meanwhile, oil prices fell for the second straight day on Tuesday amid fresh US-China trade jitter and expectations of a rise in the US inventories, which undermined the commodity-linked currency – loonie and extended some support to the major.
 
Moving ahead, market participants now look forward to the US economic docket, featuring the release of housing market data, which coupled with speeches by influential FOMC member might produce some meaningful trading opportunities later this Tuesday.

Technical levels to watch