USD/CAD drops toward 1.32 as USD sell-off gains momentum

The US Dollar Index breaks below 96.50.
WTI recovers to $56 to support loonie.

Eren Sengezer FXStreet

The USD/CAD pair broke below its daily trading range in the last hour and fell to a fresh 6-day low of 1.3213. As of writing, the pair was trading a couple of pips above that level, losing 0.19% on a daily basis.

The selling pressure surrounding the greenback gathered strength in the last hour after several news outlets claimed that the U.S. was pressing for a stable yuan exchange rate in trade talks with China. Additionally, the 10-year T-bond yield extended its slide to put additional weight on the greenback's shoulders. The US Dollar Index, which advanced to its highest level of 2019 last week above the 97 mark, was last seen down 0.32% on the day at 96.46.

Additionally, the improved sentiment in the session helped crude oil prices gain traction and erase its daily losses to allow the loonie to outperform the dollar. Ahead of the weekly API stock report, the barrel of West Texas Intermediate is flat on the day near $56.

There won't be any macroeconomic data released from Canada on Wednesday and the DXY is likely to stay as the primary driver of the pair's action especially after the FOMC publishes the minutes of its last meeting tomorrow.

Key technical levels

USD/CAD

Overview:
    Today Last Price: 1.3216
    Today Daily change %: -0.19%
    Today Daily Open: 1.3241
Trends:
    Daily SMA20: 1.3239
    Daily SMA50: 1.3359
    Daily SMA100: 1.325
    Daily SMA200: 1.315
Levels:
    Previous Daily High: 1.3258
    Previous Daily Low: 1.3225
    Previous Weekly High: 1.3341
    Previous Weekly Low: 1.3196
    Previous Monthly High: 1.3664
    Previous Monthly Low: 1.3118
    Daily Fibonacci 38.2%: 1.3238
    Daily Fibonacci 61.8%: 1.3245
    Daily Pivot Point S1: 1.3225
    Daily Pivot Point S2: 1.3209
    Daily Pivot Point S3: 1.3193
    Daily Pivot Point R1: 1.3257
    Daily Pivot Point R2: 1.3274
    Daily Pivot Point R3: 1.329

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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