USD/CAD drops below 1.4000 as WTI extends recovery

USD/CAD turns south after rising to 1.4065 on Monday.
Crude oil recovery helps commodity-sensitive CAD find demand.
US Dollar Index retreats to 100 area ahead of CPI data.

Eren Sengezer FXStreet

The USD/CAD pair gained 70 pips on Monday and continued to push higher on Tuesday to touch a daily high of 1.4065. However, the recovery witnessed in crude oil prices helped the CAD outperform its American counterpart and weighed on the pair. As of writing, USD/CAD was down 0.15% on a daily basis at 1.3985.

Despite OPEC+ producers' announcements of additional oil output cuts, the barrel of West Texas Intermediate (WTI) closed Monday deep in the negative territory. With risk-on flows starting to dominate the markets on Tuesday, the WTI turned north and was last seen gaining 3.6% on the day at $26.25.

USD weakens ahead of CPI data

On the other hand, the upbeat market mood as reflected by rising European equity indexes is making it difficult for the safe-haven greenback to gather strength. The US Dollar Index, which rose more than 1% on Monday, is posting modest daily losses around the 100 mark, keeping the bearish pressure on USD/CAD intact.

Later in the session, the inflation report from the US will be looked upon for fresh impetus. Markets expect the annual core Consumer Price Index to fall to 1.7% in April from 2.1% in March. There won't be any significant macroeconomic data releases from Canada and the USD's valuation is likely to impact the pair's movements in the second half of the day.

Technical levels to watch for

USD/CAD

Overview
Today last price	1.3985
Today Daily Change	-0.0023
Today Daily Change %	-0.16
Today daily open	1.4008

Trends
Daily SMA20	1.4046
Daily SMA50	1.4018
Daily SMA100	1.3595
Daily SMA200	1.3412

Levels
Previous Daily High	1.4043
Previous Daily Low	1.3901
Previous Weekly High	1.4173
Previous Weekly Low	1.3909
Previous Monthly High	1.4299
Previous Monthly Low	1.385
Daily Fibonacci 38.2%	1.3988
Daily Fibonacci 61.8%	1.3955
Daily Pivot Point S1	1.3925
Daily Pivot Point S2	1.3842
Daily Pivot Point S3	1.3782
Daily Pivot Point R1	1.4067
Daily Pivot Point R2	1.4126
Daily Pivot Point R3	1.4209

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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