The USD/CAD pair was closed at 1.35025 after placing a high of 1.35850 and a low of 1.34838. Overall the movement of USD/CAD remained bearish throughout the day. The USD/CAD pair extended its previous day's losses and moved below 1.3500 level for the first time since early March. The pair's movement was due to the risk of market sentiment, which continued to weigh on the greenback. The rising prices of WTI crude oil also added to the downfall of the USD/CAD pair on Tuesday.
There was a strong risk appetite in the market, which continuously weighed on the US dollar and caused a sudden fall in the US Dollar Index below 97.5 level.
On the other hand, the hopes that OPEC+ would extend the oil output cuts supported the crude oil prices on Tuesday and made the West Texas Intermediate post gains of 1.5% at $36. The increased crude oil prices gave strength to the commodity-linked Loonie ad added in the downward movement of the USD/CAD pair.
Furthermore, the Canadian traders will be looking forward to the announcement of the Bank of Canada's interest rate decision on Wednesday in its policy statement. The first decision of the new governor of Bank of Canada, Tiff Macklem, who took over from Governor Poloz will be under watch to see fresh impetus.
However, the BoC is expected to leave its rates unchanged at 0.25% and announce another stimulus package to cope up with the damage caused by coronavirus pandemic to the economy. The broad-based US dollar weakness due to increased risk sentiment along with the strength of the Canadian dollar due to increased crude oil prices dragged down the USD/CAD pair on Tuesday to its lowest since early March.
Daily Technical Levels:
Pivot Point: 1.3529
The USD/CAD pair's bullish bias is holding around 1.3570 level, and the commodity currency pair has started coming out of the oversold zone. AS we can see in the chart, the RSI is peaking out of 20, suggesting odds of bullish retracement in the pair. On the higher side, the USD/CAD is likely to head towards 38.2% Fibonacci retracement until 1.3616 level. Let's consider taking buying trades over the 1.3480 support level today. Good luck!