USD/CAD extends sideways grind around 1.2760 ahead of mid-tier data releases
- USD/CAD is moving up and down in a narrow band.
- Wtı trades flat on the day near $47.
- US Dollar Index stays quiet around 90.60 on Tuesday.
The USD/CAD edged lower toward 1.2700 on Monday but erased the majority of its daily losses to close little changed at 1.2760. On Tuesday, USD/CAD is struggling to determine its next short-term direction in the absence of significant market drivers. As of writing, the pair was flat on the day at 1.2758.
Oil rally loses momentum
Rising crude oil prices at the start of the week helped the commodity-related CAD find demand. However, OPEC's dismal energy demand recovery outlook caused the barrel of West Texas Intermediate (WTI) to turn south in the second half of the day on Monday and allowed USD/CAD to stage a rebound. On Tuesday, the WTI is virtually unchanged on a daily basis around $47, failing to provide a directional clue to USD/CAD.
In the meantime, the risk-positive market environment, as mirrored by rising global equity indexes, is forcing the greenback to stay quiet against its rivals. At the moment, the US Dollar Index is posting small daily losses around 90.60.
Later in the day, Manufacturing Sales and Housing Starts data will be featured in the Canadian economic docket. At 1930 GMT, Bank of Canada (BoC) Governor Tiff Macklem is scheduled to deliver a speech. On the other hand, the US Federal Reserve will release Industrial Production and Capacity Utilization figures.
Technical levels to watch for