USD / CAD consolidates daily gains, looking to rise above 1.2300

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The broad-based USD strength helped the USD / CAD rally on Tuesday.
Rising oil prices limit the rise in USD / CAD for the time being.
Canada posted a trade deficit of C $ 1.1 billion in March.

The USD / CAD pair broke above 1.2300 on Tuesday and reached its highest level in nearly a week at 1.2350 before entering a consolidation phase. At time of writing, the pair was up 0.26% on the day at 1.2308.

DXY remains above 91.00

Following Monday’s sharp decline, the US dollar index (DXY) managed to reverse its direction as the dollar capitalized on safe-haven flows. With the major Wall Street indices opening deeply lower, the DXY reached its highest level since April 22 at 91.40.

The US Census Bureau reported Tuesday that factory orders rose 1.1% in March, compared with an analyst estimate of 1.3%.

Meanwhile, data released by Statistics Canada revealed that Canada posted an international merchandise trade deficit of C $ 1.1 billion in March. This reading was worse than the market’s expectation of a Cdn $ 0.7 billion surplus and allowed the USD / CAD bullish momentum to remain intact.

On the other hand, crude oil prices continued to rise amid the improving outlook for energy demand. A barrel of West Texas Intermediate (WTI) is currently trading at its highest since mid-March at $ 65.70 gaining nearly 2% on the day and helping the commodity-related Canadian dollar limit its losses.

Technical levels

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