USD/CAD struggles to extend higher above 1.31 as WTI breaks above $69

• CAD sticks to its gains against the USD in the early NA session.
• WTI rises to new 5-day high above $69.
• US Dollar Index recovers above 94.50.

The USD/CAD pair slumped to a fresh 2-week low at 1.3080 during the early NA session and found support there. Although the greenback gathered some strength and lifted the pair back above the 1.31 mark, rising crude oil prices allowed the commodity-sensitive loonie to stay resilient against its rivals. As of writing, the pair was down 50 pips on the day while trading at 1.3105.

After closing the previous day nearly $1 higher, the barrel of West Texas Intermediate continued its march north following the weekly crude stock report from the United States. According to the EIA, crude oil inventories decreased by 6.1 million barrels for the week ending July 16 to surpass the market expectation of a drop of 2.3 million barrels. At the moment, the barrel of WTI is up 1.23% on the day at $69.60.

On the other hand, for the second day in a row, the US Dollar Index is having a difficult time pulling away from mid-94s. Although today’s data from the U.S. showed that new home sales fell by 5.3% from May to June, the DXY moves sideways near 94.60, where it’s virtually flat on the day.

There won’t be any macroeconomic data releases from the United States in the remainder of the day and the pair is likely to stay in its recent range.

Technical outlook

With today’s fall, the RSI indicator on the daily chart eased below the 50 mark, suggesting that the bearish momentum is gathering strength. Supports could be seen at 1.3080 (daily low), 1.3000 (psychological level) and 1.2960 (100-DMA). On the upside, resistances align at 1.3125 (50-DMA), 1.3190 (Jul. 24 high) and 1.3225 (Jul. 2/Jul. 7/Jul. 11 high).