USD/CAD oscillates around 1.3600, upside remains favored as oil tumbles below $80.00

The USD/CAD pair has turned sideways after printing a fresh two-decade high at 1.3623 in the Asian session. The asset is preparing for a fresh rally as it is expected to continue its four-days winning spree. A minor corrective move cannot be ruled out as the asset is continuously scaling higher and the US dollar index (DXY) also displays some signs of exhaustion after printing a fresh two-decade high of 114.52.

The DXY is losing momentum as momentum oscillators have turned extremely overbought on lower time frames. The asset remained extremely stronger on souring market sentiment. The rumoured house arrest of Chinese leader Xi Jinping and warning of a nuclear attack by Russian leader Vladimir Putin has dented the sentiment of market participants.

A volatile performance is also expected from the DXY as investors are awaiting the release of the US Durable Goods Orders data, which will release on Tuesday. The orders for Durable Goods are expected to drop by 1.1%, against the prior release of 0.1%. The decline in the economic data is mainly because of higher prices for durable goods. Also, the core Consumer Price Index (CPI) accelerated to 6.3% vs. the former figure of 5.9%.

It is worth noting that the USD/CAD pair is seen much stronger than the DXY, which indicates that the Canadian dollar is also weakend along with a firmer DXY. The loonie has turned fragile on weaker oil prices. The black gold has surrendered the psychological support of $80.00 as ultra-hawkish guidance by the Federal Reserve (Fed) on interest rates has trimmed the growth prospects and eventually demand for oil. Also, gasoline demand is falling sharply in the US economy.