USD/CAD extends recovery above 1.3400 as DXY closes in on 94.00
- USD/CAD rebounds above 1.3400 after dropping to fresh multi-week low.
- US Dollar Index is rising toward 94.00 following Monday's slump.
- WTI trades with modest losses ahead of API data.
The USD/CAD pair dropped to its lowest level since June 10th at 1.3329 on Tuesday but staged a decisive recovery ahead of the American session. As of writing, the pair was trading a little below the daily high it set at 1.3407, gaining 0.32% on a daily basis.
DXY rebounds amid sour market mood
After suffering heavy losses against its major peers in the last two weeks, the greenback is finally gathering strength with the US Dollar Index (DXY) climbing toward 94.00. Although there were no fundamental drivers that could ramp up the demand for the USD, the cautious market mood seems to be helping the DXY gain traction.
In the second half of the day, the Conference Board will release its monthly Consumer Confidence data. Previewing this publication, “Confidence from the Conference Board is forecast to drop to 94.5 this month from 98.1 in June," noted FXStreet analyst Joseph Trevisani. “Markets will not be swayed by this sentiment figure but they are certainly attending to the claims and payroll numbers due this week and next.”
Meanwhile, crude oil stays under modest pressure in the risk-averse market environment and making it difficult for the loonie to show resilience against its American counterpart. Ahead of the American Petroleum Institue's weekly Crude Oil Stock data, the barrel of West Texas Intermediate is down 0.4% on the day at $41.45.
Technical levels to watch for