- USD/CAD is in some selling on Tuesday and is pressured by a combination of factors.
- A fresh recovery in oil prices benefits the CAD and puts pressure on the pair amid a weaker USD.
- The fall seems limited, as investors wait for a new boost from the US CPI ahead of the FOMC.
The USD/CAD comes under some selling pressure during the first half of the European session on Tuesday and falls to a new daily low, around the 1.3600 level in the last hour.
Crude Oil Prices Extend Previous Day’s Rebound from near the annual low and rise for the second consecutive session on Tuesday. This, in turn, benefits the commodity-linked CAD, which, coupled with a modest pullback in the US dollar, is putting some downward pressure on the USD/CAD pair.
Optimism around the easing of COVID-19 restrictions in China remains supportive of the recent recovery in risk appetite and continues to weigh on the safe-haven USD. Furthermore, uncertainty about the Fed’s rate hike path acts as a headwind for US Treasury yields and keeps USD bulls on the defensive.
Traders, however, could refrain from opening aggressive positions before the release of the trading figures. US consumer inflation, which will be published later during the North American session. The US CPI report will influence the Fed’s monetary policy and help determine the near-term path of the dollar.
Attention will then turn to the outcome of the FOMC’s two-day policy meeting, to be announced on Wednesday amid uncertainty over the US central bank’s rate hike path. Therefore, it would be prudent to wait for further selling before positioning for a further USD/CAD lower move.
USD/CAD technical levels
Source: Fx Street
I am Joshua Winder, a senior-level journalist and editor at World Stock Market. I specialize in covering news related to the stock market and economic trends. With more than 8 years of experience in this field, I have become an expert in financial reporting.
