USD/CAD rebounds to mid-1.32s as DXY floats above 97
After dropping to its daily low at 1.3220, the USD/CAD pair gathered a recovery momentum and erased the majority of its daily losses. As of writing, the pair is trading at 1.3252, down only 14 pips on the day.
The greenback came under a fresh selling pressure at the beginning of the NA session as the macro data from the U.S. couldn't meet the expectations. However, it didn't take long for the US Dollar Index to stage a rebound. In fact, the index reached its daily high at 97.16 in the second half of the session. At the moment, the index is at 97.12, up 0.14% on the day.
- US Dollar Index recovers and rises back to daily highs, above 97.00
In addition to the greenback weakness, the technical recovery seen in crude oil prices helped the commodity-linked loonie find some demand during the day. Nevertheless, the barrel of West Texas Intermediate lost its bullish momentum above the $43 handle, and is now trading at $43.50, up 1% on the day, making it difficult for the CAD to preserve its strength against the USD.
- WTI struggles for direction on $43 handle
Tomorrow's economic calendar won't be offering any data from Canada. FOMC member Harker and Fed Chairwoman Yellen's speeches will be looked upon for fresh impetus in the NA session.
Technical outlook
The pair could encounter the initial resistance at 1.3335 (20-DMA) ahead of 1.3365 (200-DMA/Jun. 21 high) and 1.3485 (50-DMA). On the downside, supports align at 1.3200 (psychological level), 1.3165 (Jun. 14 low) and 1.3100 (psychological level).
- USD/CAD neutral/bearish near term – Scotiabank