USD/CAD drops below 1.32 as DXY slumps to 3-week lows

US Dollar Index extends decline for the third straight day.
WTI posts modest daily gains on Tuesday.

Eren Sengezer FXStreet

The USD/CAD pair came under a renewed bearish pressure and erased more than 50 pips in the last hour to edge below the 1.32 mark. As of writing, the pair was virtually unchanged on the day at 1.3190.

A broad-based USD weakness seen in the early NA session seems to be the primary driver of the pair's price action. The greenback struggled to gather strength on Tuesday amid, yet another, 1% drop witnessed in the 10-year T-bond yield. Additionally, today's data and FOMC Chairman Powell's comments failed to help the buck find demand. At the moment, the DXY is at its lowest level since the first week of February at 96.17, losing 0.26% on a daily basis.

In his testimony before the Congress, Powell reiterated that the Fed could stay patient with the monetary policy and added that the Fed would use all the tools available to sustain the economic expansion and to keep inflation near 2%.

On the other hand, the commodity-sensitive loonie is finding extra demand on the back of rising crude oil prices. Ahead of the API's weekly crude oil stock report, the barrel of West Texas Intermediate is trading at $55.85, gaining 0.75% on the day.

Key technical levels

USD/CAD

Trends:
    Daily SMA20: 1.3209
    Daily SMA50: 1.3341
    Daily SMA100: 1.3264
    Daily SMA200: 1.3159
Levels:
    Previous Daily High: 1.3198
    Previous Daily Low: 1.3112
    Previous Weekly High: 1.3294
    Previous Weekly Low: 1.3134
    Previous Monthly High: 1.3664
    Previous Monthly Low: 1.3118
    Daily Fibonacci 38.2%: 1.3165
    Daily Fibonacci 61.8%: 1.3145
    Daily Pivot Point S1: 1.3138
    Daily Pivot Point S2: 1.3083
    Daily Pivot Point S3: 1.3053
    Daily Pivot Point R1: 1.3223
    Daily Pivot Point R2: 1.3253
    Daily Pivot Point R3: 1.3309

Author

Eren Sengezer

FXStreet

As an economist at heart, Eren Sengezer specializes in the assessment of the short-term and long-term impacts of macroeconomic data, central bank policies and political developments on financial assets.

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