- USD/CAD eases from intraday top, rejects corrective pullback around multi-month low.
- WTI consolidates recent gains on mixed signals, market sentiment fails to extend Monday’s optimism.
- Canadian traders’ return, US data and inflation chatters are the key.
USD/CAD holds lower ground near 1.2050, up 0.05% intraday, while easing from the day’s top during early Tuesday. The Loonie pair ignored off in Canada by declining the most the previous day amid the broad US dollar weakness and WTI strength the previous day. However, mixed catalysts and a lack of fresh directives trouble the pair traders of late.
Also, the downbeat performance of Canada’s key export item, WTI, joins the greenback’s inactivity to test the USD/CAD upside. That said, WTI consolidates a two-day uptrend with a 0.11% drop to $65.90 by the press time. Alternatively, the US dollar index (DXY) pauses for a breath, after the previous day’s downside moves, around 89.80.
It’s worth mentioning that the global dissent to US President Joe Biden’s 15% corporate tax and mixed comments from Fed officials, recently by Kansas City Federal Reserve President Esther George, weighs on the market’s sentiment, indirectly help USD/CAD buyers. Though, fears of reflation and upbeat S&P 500 Futures, not to forget hawkish comments from the Bank of Canada (BOC) Governor Tiff Macklem, tame the bulls.
Amid these plays, US 10-year Treasury yields remain depressed near 1.60%, suggesting further hardships for the US dollar and USD/CAD prices.
Not only the US Treasury but Canadian traders’ return from the extended weekend and second-tier activity, as well as housing, data from the US will be the key for USD/CAD traders going forward. It should be noted that major attention will be given to Friday’s key inflation gauge, also the Fed’s favorite, which in turn suggests further tiring market moves before the event.
Technical analysis
A two-week-old descending trend channel restricts short-term USD/CAD moves between 1.2110 and 1.2060.