- USD/CAD goes into consolidation after jumping to multi-month highs.
- US Dollar Index continues to edge higher, holds above 92.00.
- Crude oil stays quiet following Monday’s sharp decline.
Following Monday’s upsurge, the USD/CAD pair preserved its bullish momentum and reached its highest level since late January at 1.2805 on Tuesday. However, the pair struggled to extend its rally and erased the majority of its daily gains. As of writing, USD/CAD was up 0.05% on the day at 1.2754.
DXY renews multi-month highs above 93.00
The sharp decline witnessed in crude oil prices and the unabated USD strength fueled USD/CAD’s upside at the start of the week. Pressured by the worsening demand outlook and renewed prospects for increased output, the barrel of West Texas Intermediate (WTI) lost nearly 7%. On Tuesday, WTI is trading flat around the mid-$66s, helping the commodity-related CAD limit its losses.
On the other hand, the US Dollar Index is currently trading at its strongest level since early April at 93.08, rising 0.27% and allowing USD/CAD to stay in the positive territory.
Meanwhile, Wall Street’s main indexes remain on track to open higher on Tuesday, suggesting that the greenback could have a hard time gathering strength against its rivals in the second half of the day.
There won’t be any data releases featured in the Canadian economic docket and the risk-perception alongside crude oil prices is likely to continue to impact USD/CAD’s movements.
Technical levels to watch for