USD/CAD drops below 1.32 on weaker greenback and recovering crude oil

Eren Sengezer FXStreet

The USD/CAD pair, which had been able to find support at the 1.32 handle since the beginning of last week, fell to its lowest level since June 19 at 1.3192 as crude oil continued to build on its gains from yesterday and the greenback remained under pressure. At the moment, the pair is trading at 1.3208, down 0.25% on the day.

After earning more than 1% on Monday, the barrel of West Texas Intermediate sustained its bullish momentum on Tuesday and broke tested the $44 handle. Although it retraced some of its gains, the barrel of WTI is still up 0.8% on the day, trading at $43.70, keeping the demand alive for the commodity-linked loonie.

WTI firmer, eyes on $44.00 ahead of API

In the meantime, the greenback is being sold aggressively on Tuesday, pushing the US Dollar Index dangerously close to its 7-month low of 97.30. At the moment, the index is trading at 96.44, losing 0.68% on the day. The last data from the U.S. showed that the S&P/Case-Shiller Home Price Index came in at 5.7%, recording its fifth consecutive increase in May, however, failed to help the greenback start a recovery move. There were no data releases from Canada during the day.

US: National home prices rise for fifth consecutive month

In the remainder of the NA session, FOMC member Harker (15:15 GMT), Fed Chairwoman Janet Yellen (17:00 GMT) and FOMC member Kashkari (21:30 GMT) will be giving their speeches.

Technical outlook

The RSI indicator on the H1-chart dropped below the 30 mark in the last hour, suggesting that the pair is technically oversold and make a recovery before the next leg down. 1.3165 (Jun. 14 low) could be seen as the first technical support ahead of 1.3100 (psychological level) and 1.3060 (Feb. 15 low). On the upside, resistances align at 1.3260 (daily high), 1.3320 (20-DMA) ahead of 1.3360 (200-DMA/Jun. 21 high).

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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