USD/CAD goes into consolidation above 1.3600 after advancing to two-week highs
- USD/CAD clings to small daily gains above 1.3600.
- Sour market mood weighs on risk-sensitive CAD on Tuesday.
- US Dollar Index stays in red near 96.40 ahead of CPI data.
Despite the broad-based selling pressure surrounding the greenback on Monday, the USD/CAD pair closed the day in the positive territory above 1.3600. With the commodity-sensitive loonie struggling to find demand amid crude oil's poor performance, the pair stretched higher on Tuesday and touched a fresh two-week high of 1.3647 before going into a consolidation phase. As of writing, the pair was up 0.07% on the day at 1.3618.
Oil selloff hurts CAD
Although the data from China revealed on Tuesday that crude oil imports surged by 34.4% (annually) in June to a record high of 12.99 million barrels per day, crude oil prices struggled to gain traction. The surging number of coronavirus infections globally seems to be forcing investors to remain cautions about the energy demand outlook.
The barrel of West Texas Intermediate (WTI) lost nearly 2.5% on Monday and was last seen flat on the day at $39.58.
Meanwhile, the sour market mood, as reflected by heavy losses witnessed in major European equity indexes, is putting additional weight on the risk-sensitive CAD's shoulders.
On the other hand, the greenback is staying relatively calm against its major rivals, making it difficult for USD/CAD to push higher. Ahead of the Consumer Price ındex (CPI) data from the US, the US Dollar Index is down 0.13% on the day at 96.40.
Later in the day, the API's Weekly Crude Oil Stock report will be watched closely by the market participants as well.
Technical levels to watch for
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.
