USD/CAD recovers above 1.34 as crude oil gains traction

WTI adds more than 1% on Tuesday.
US Dollar Index stays calms near 97 handle.
Coming up: February CPI data from the U.S.

Eren Sengezer FXStreet

After spending the Asian session in a very narrow range below the 1.34 mark, the USD/CAD pair staged a modest recovery in the last hour and was last seen trading at 1.3410, where it was up 0.15% on a daily basis.

Although investors seem to be staying on the sidelines ahead of the inflation data from the U.S., rising crude oil prices support the commodity-sensitive loonie. As of writing, the barrel of West Texas Intermediate is trading above $57 and gaining more than 1% on the day. Reports of Saudi Arabia planning to intensify its output cuts before the April OPEC meeting are boosting crude oil prices since the start of the week.

On the other hand, the greenback stays under pressure for the third straight trading day on Tuesday with markets staying focused on hopes of British lawmakers accepting PM May's tweaked Brexit deal later today. At the moment, the US Dollar Index is staying flat on the day near the 97 handle. Previewing today's critical CPI data, “Price pressures will benefit higher food and gasoline prices and another solid 0.2% increase in core CPI, leaving the latter unchanged at 2.2% y/y. There is risk for a slight deceleration in shelter, but we expect strength elsewhere, including tariff-related categories, medical care and airfares,” TD Securities analysts said in a recently published report.

Key technical levels

Trends:
    Daily SMA20: 1.3268
    Daily SMA50: 1.3278
    Daily SMA100: 1.3292
    Daily SMA200: 1.3179
Levels:
    Previous Daily High: 1.344
    Previous Daily Low: 1.3392
    Previous Weekly High: 1.3469
    Previous Weekly Low: 1.3275
    Previous Monthly High: 1.3341
    Previous Monthly Low: 1.3069
    Daily Fibonacci 38.2%: 1.3411
    Daily Fibonacci 61.8%: 1.3422
    Daily Pivot Point S1: 1.3377
    Daily Pivot Point S2: 1.3361
    Daily Pivot Point S3: 1.3329
    Daily Pivot Point R1: 1.3425
    Daily Pivot Point R2: 1.3457
    Daily Pivot Point R3: 1.3473

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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