USD/CAD keeps the red near 1.3500, lacks follow-through ahead of US macro data

USD/CAD meets with some supply on Tuesday and is pressured by a combination of factors.
Attacks on shipping in the Red Sea lend support to Oil prices, which underpins the Loonie.
Sliding US bond yields keep the USD bulls on the defensive and contribute to the decline.

Haresh Menghani FXStreet

The USD/CAD pair comes under some selling pressure on Tuesday and maintains its offered tone through the first half of the European session. Spot prices currently trade just below the 1.3500 psychological mark and for now, seem to have snapped a two-day winning streak to a multi-day peak touched on Monday.

Crude Oil prices attract some buyers for the second straight day in the wake of growing concerns about supply disruptions in the Middle East, led by persistent attacks by Iran-aligned Houthis on commercial vessels in the Red Sea. This, in turn, is seen underpinning the commodity-linked Loonie, which, along with the prevalent selling bias around the US Dollar (USD), exerts some downward pressure on the USD/CAD pair.

In fact, the USD Index (DXY), which tracks the Greenback against a basket of currencies, continues with its struggle to gain any meaningful traction amid a fresh leg down in the US Treasury bond yields. That said, firming expectations that the Federal Reserve (Fed) will wait until June before cutting interest rates should act as a tailwind for the US bond yields, which should limit losses for the USD and the USD/CAD pair.

Looking at the broader picture, spot prices have been oscillating in a familiar trading range over the past two weeks or so. This further warrants some caution before placing aggressive directional bets ahead of this week's release of the crucial US Personal Consumption Expenditures (PCE) Price Index on Thursday. The data should provide cues about the Fed's rate-cut path, which, in turn, will drive the USD and the USD/CAD pair.

In the meantime, traders on Tuesday will take cues from the US economic docket – featuring the releases of Durable Goods Orders, the Conference Board's Consumer Confidence Index and the Richmond Manufacturing Index. This, along with the US bond yields, will influence the USD. Apart from this, Oil price dynamics should contribute to producing short-term trading opportunities around the USD/CAD pair.

USD/CAD

Overview
Today last price	1.3497
Today Daily Change	-0.0009
Today Daily Change %	-0.07
Today daily open	1.3506

Trends
Daily SMA20	1.3481
Daily SMA50	1.3416
Daily SMA100	1.3542
Daily SMA200	1.3478

Levels
Previous Daily High	1.3529
Previous Daily Low	1.3492
Previous Weekly High	1.3536
Previous Weekly Low	1.3441
Previous Monthly High	1.3542
Previous Monthly Low	1.3229
Daily Fibonacci 38.2%	1.3506
Daily Fibonacci 61.8%	1.3515
Daily Pivot Point S1	1.3489
Daily Pivot Point S2	1.3472
Daily Pivot Point S3	1.3452
Daily Pivot Point R1	1.3526
Daily Pivot Point R2	1.3546
Daily Pivot Point R3	1.3564

Author

Haresh Menghani

FXStreet

Haresh Menghani is a detail-oriented professional with 10+ years of extensive experience in analysing the global financial markets.

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