USD/CAD recovers back above 1.29, struggles to find direction
The USD/CAD pair caught some fresh bids in the first half of the NA session and climbed above the 1.29 handle. As of writing, the pair was trading at 1.2920, up 0.25% on the day.
This recent rise seems to be driven by the greenback strength. After dropping to 95.77 at the opening hour of the American session, the US Dollar Index moved back into the positive territory and is now up 0.04% at 95.85. However, today's macro data from the U.S. were largely ignored by the participants and this move seems to be a technical fluctuation. Ahead of Fed Chairwoman Janet Yellen's testimony on Wednesday and Thursday, investors remain hesitant to take large positions.
- US: May 2017 sales of merchant wholesalers were $460.8 billion, down 0.5% from April level
- US: Number of job openings decreased to 5.7 million
On the other hand, choppy movements seen in crude oil prices fail to provide a fresh catalyst for the loonie. After dropping to a fresh low at $43.84, the barrel of West Texas Intermediate recovered nearly $1 to inch closer to the $45 handle in the last hour, limiting any further gains in the pair so far.
- Goldman Sachs on Oil: Markets still searching for the equilibrium
Technical outlook
The pair is trading in a tight 45-pip channel on Tuesday. The RSI indicator on the H4 chart is also suggesting the short-term neutral outlook as it's moving near the 50 mark. With a break below 1.2858 (10-month low), the pair could aim for 1.2820 (Sept. 7 low) and 1.2760 (Aug. 18 low). On the upside, resistances align at 1.2940 (10-DMA), 1.3000 (psychological level) and 1.3070 (20-DMA).