USD/CAD sees downside below 1.3680 Middle East tensions improve oil price outlook

USD/CAD refreshes day low as higher oil prices strengthen the Canadian Dollar.
Canadian Retail Sales report indicates that automobile demand remained weak.
The US Dollar turned soft due to neutral guidance from Fed Powell.

Sagar Dua FXStreet

The USD/CAD pair faces selling pressure after a less-confident pullback move to near the round-level resistance of 1.3700 in the early New York session. The Loonie asset is expected to deliver a fresh downside below 1.3680 as the Canadian Dollar has strengthened due to upbeat oil prices.

The demand for oil improves due to escalating Middle East tensions, which would tighten the oil supply amid disruption in the oil supply chain. In addition to that, the United States Department of Energy (DOE) has announced the refilling of the Strategic Petroleum Reserve (SPR). The US government has been drawing oil from SPR since the onset of the Russia-Ukraine war.

It is worth noting that Canada is the leading exporter of oil to the United States and higher oil prices strengthened the Canadian Dollar.

Meanwhile, Statistics Canada has reported better-than-anticipated Retail Sales data for August. Monthly Retail Sales contracted at a slower pace of 0.1% while economists projected a decline of 0.3%. In July, the Retail Sales grew by 0.4%. Retail Sales excluding automobiles expanded by 0.1% against expectations of a stagnant performance.

The Retail Sales report indicates that automobile demand remained weak as households are facing the burden of higher borrowing costs.

The US Dollar turned soft as Federal Reserve (Fed) Chair Jerome Powell delivered neutral guidance on interest rates. Fed Powell conveyed that higher US Treasury yields have significantly tightened overall financial conditions.

USD/CAD

Overview
Today last price	1.3676
Today Daily Change	-0.0043
Today Daily Change %	-0.31
Today daily open	1.3719

Trends
Daily SMA20	1.3616
Daily SMA50	1.3575
Daily SMA100	1.3421
Daily SMA200	1.3469

Levels
Previous Daily High	1.3741
Previous Daily Low	1.3679
Previous Weekly High	1.3701
Previous Weekly Low	1.3569
Previous Monthly High	1.3694
Previous Monthly Low	1.3379
Daily Fibonacci 38.2%	1.3717
Daily Fibonacci 61.8%	1.3703
Daily Pivot Point S1	1.3685
Daily Pivot Point S2	1.3652
Daily Pivot Point S3	1.3624
Daily Pivot Point R1	1.3747
Daily Pivot Point R2	1.3775
Daily Pivot Point R3	1.3809

Author

Sagar Dua

FXStreet

Sagar Dua is associated with the financial markets from his college days. Along with pursuing post-graduation in Commerce in 2014, he started his markets training with chart analysis.

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