USD/CAD extends slide below 1.4050 ahead of FOMC Chairman Powell's speech

USD/CAD loses its bullish momentum before testing 1.4100.
WTI clings to gains near $26 ahead of API, helping CAD gather strength.
US Dollar Index stays quiet below 100 as focus shifts to Powell's speech.

Eren Sengezer FXStreet

The USD/CAD pair closed the first two days of the week in the positive territory as the lackluster performance of crude oil made it tough for commodity-related loonie find demand. However, the pair lost its momentum for the second straight dau before reaching 1.4100 and dropped into the negative territory. As of writing, USD/CAD was down 0.32% on a daily basis at 1.4032.

The barrel of West Texas Intermediate (WTI) posted small daily gains on Tuesday as fears over a second coronavirus wave outweighed additional output cuts. Ahead of the US Energy Information Administration's (EIA) Weekly Petroleum Status Report, the WTI is up 1.3% on the day at $26.20, allowing the CAD to stay resilient against its rivals.

USD stays on the back foot ahead of Powell's speech

On the other hand, the US Dollar Index is staying below 100 to reflect the modest selling pressure surrounding the greenback.

Later in the day, the Producer Price Index will be the only data featured in the US economic docket. More importantly, FOMC Chairman Jerome Powell will deliver a speech on the state of the economy at the Peterson Institute for International Economics at 1300 GMT.

Previewing this event, “Powell is expected to categorically deny the option of setting negative interest rates and that may marginally weigh on stocks and support the dollar," said FXStreet Yohay Elam. "However, if he surprises by refusing to rule out going below zero, the dollar will likely dive and stocks could surge.”

Technical levels to watch for

USD/CAD

Overview
Today last price	1.4029
Today Daily Change	-0.0049
Today Daily Change %	-0.35
Today daily open	1.4078

Trends
Daily SMA20	1.4055
Daily SMA50	1.4032
Daily SMA100	1.3604
Daily SMA200	1.3416

Levels
Previous Daily High	1.408
Previous Daily Low	1.3973
Previous Weekly High	1.4173
Previous Weekly Low	1.3909
Previous Monthly High	1.4299
Previous Monthly Low	1.385
Daily Fibonacci 38.2%	1.4039
Daily Fibonacci 61.8%	1.4013
Daily Pivot Point S1	1.4007
Daily Pivot Point S2	1.3936
Daily Pivot Point S3	1.39
Daily Pivot Point R1	1.4114
Daily Pivot Point R2	1.4151
Daily Pivot Point R3	1.4222

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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