- Escalating geopolitical tensions lifted Oil prices sharply higher and led to a bearish gap opening.
- As Oil prices cooled off, a modest USD uptick helped find decent support near the 1.3200 handle.
The USD/CAD pair built on its steady intraday climb and moved back above mid-1.3200s, recovering a major part of the weekly bearish gap opening.
Drone strikes on the world's largest crude-processing facilities in Saudi Arabia triggered a sharp intraday upsurge in Oil prices, which eventually provided a strong boost to the commodity-linked currency - Loonie and led to the pair's big weekly bearish gap opening.
Oil eases from tops/stronger USD helped gain traction
The pair erased all of its strong gains recorded on Friday, supported by upbeat US monthly retail sales data, though a combination of factors helped the pair to find decent support near the 1.3200 handle and stage a solid intraday recovery of around 60-pips.
As Oil prices cooled off daily tops, now up around 8% as compared to earlier intraday gains of nearly 20%, a modest pickup in the US Dollar demand seemed to be one of the key factors lending some support, rather attracted some meaningful buying interest at lower levels.
It, however, remains to be seen if the pair is able to capitalize on the recovery move or runs out of the steam at higher levels amid firming expectations that the Fed will ease further later this week and absent relevant market-moving economic releases - either from the US or Canada.
Technical levels to watch
Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers. The author will not be held responsible for information that is found at the end of links posted on this page.
If not otherwise explicitly mentioned in the body of the article, at the time of writing, the author has no position in any stock mentioned in this article and no business relationship with any company mentioned. The author has not received compensation for writing this article, other than from FXStreet.
FXStreet and the author do not provide personalized recommendations. The author makes no representations as to the accuracy, completeness, or suitability of this information. FXStreet and the author will not be liable for any errors, omissions or any losses, injuries or damages arising from this information and its display or use. Errors and omissions excepted.
The author and FXStreet are not registered investment advisors and nothing in this article is intended to be investment advice.
Recommended content
Editors’ Picks
EUR/USD fluctuates in daily range above 1.0600
EUR/USD struggles to gather directional momentum and continues to fluctuate above 1.0600 on Tuesday. The modest improvement seen in risk mood limits the US Dollar's gains as investors await Fed Chairman Jerome Powell's speech.
GBP/USD stabilizes near 1.2450 ahead of Powell speech
GBP/USD holds steady at around 1.2450 after recovering from the multi-month low it touched near 1.2400 in the European morning. The USD struggles to gather strength after disappointing housing data. Market focus shifts to Fed Chairman Powell's appearance.
Gold retreats to $2,370 as US yields push higher
Gold stages a correction on Tuesday and fluctuates in negative territory near $2,370 following Monday's upsurge. The benchmark 10-year US Treasury bond yield continues to push higher above 4.6% and makes it difficult for XAU/USD to gain traction.
XRP struggles below $0.50 resistance as SEC vs. Ripple lawsuit likely to enter final pretrial conference
XRP is struggling with resistance at $0.50 as Ripple and the US Securities and Exchange Commission (SEC) are gearing up for the final pretrial conference on Tuesday at a New York court.
US outperformance continues
The economic divergence between the US and the rest of the world has become increasingly pronounced. The latest US inflation prints highlight that underlying inflation pressures seemingly remain stickier than in most other parts of the world.