USD/CAD trades with positive bias amid stronger USD, bullish Oil prices to cap gains

USD/CAD gains positive traction for the second straight day, albeit lacks follow-through.
Reduced bets for a June Fed rate cut lift the USD to a multi-week top and lend support.
Bullish Crude Oil prices seem to underpin the Loonie and act as a headwind for the pair.

Haresh Menghani FXStreet

The USD/CAD pair attracts some buyers for the second straight day on Tuesday and looks to build on the overnight bounce from the 1.3515 region, or over a one-week low. Spot prices currently trade around the 1.3580 area and remain supported by some follow-through US Dollar (USD) buying, though bullish Crude Oil prices might cap any further gains.

The USD Index (DXY), which tracks the Greenback against a basket of currencies, has advanced to its highest level since February 14 in the wake of doubts over whether the Federal Reserve (Fed) will cut interest rates three times this year. Investors trimmed their bets for a June Fed rate cut following the release of the upbeat US data, which showed that the manufacturing sector registered growth in March for the first time since September 2022. This remains supportive of elevated US Treasury bond yields, which, in turn, act as a tailwind for the buck and the USD/CAD pair.

Apart from this, the risk-off impulse turns out to be another factor benefitting the safe-haven Greenback. Meanwhile, Crude Oil prices stand tall near a five-month high touched on Monday amid signs of improved demand and the risk of a further escalation of tensions in the Middle East. This is seen underpinning the commodity-linked Loonie, which, in turn, might hold back traders from placing fresh bullish bets around the USD/CAD pair. Even from a technical perspective, the recent repeated failures to find acceptance above the 1.3600 mark warrant some caution.

Market participants now look forward to the US economic docket – featuring the release of JOLTS Job Openings and Factory Orders later during the early North American session. This, along with speeches by influential FOMC members, the US bond yields and the broader risk sentiment, should rive the USD demand and provide some impetus to the USD/CAD pair. Traders will further take cues from Oil price dynamics to grab short-term opportunities.

USD/CAD

Overview
Today last price	1.3582
Today Daily Change	0.0012
Today Daily Change %	0.09
Today daily open	1.357

Trends
Daily SMA20	1.3535
Daily SMA50	1.3509
Daily SMA100	1.3492
Daily SMA200	1.3499

Levels
Previous Daily High	1.3587
Previous Daily Low	1.3515
Previous Weekly High	1.3614
Previous Weekly Low	1.3525
Previous Monthly High	1.3614
Previous Monthly Low	1.342
Daily Fibonacci 38.2%	1.3559
Daily Fibonacci 61.8%	1.3542
Daily Pivot Point S1	1.3528
Daily Pivot Point S2	1.3486
Daily Pivot Point S3	1.3456
Daily Pivot Point R1	1.36
Daily Pivot Point R2	1.3629
Daily Pivot Point R3	1.3671

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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