USD/CAD pushes lower below 1.24 on oil recovery and USD weakness
The USD/CAD pair came under a renewed selling pressure just before the NA session went under way and refreshed its daily low at 1.2374. As of writing, the pair was trading a couple of pips above that level, losing 0.3% on the day.
Speaking at University Club, NY, Lael Brainard, a member of the Board of Governors of the Federal Reserve, said that the Fed should be cautious on rate hikes because of the extended period of low inflation and added that he was concerned about the recent low price readings. Following Brainard's remarks, the greenback lost strength against its peers, pushing the US Dollar Index back into the negative territory. At the moment, the DXY was at 92.48, down 0.1% on the day.
On the other hand, amid fresh news of Russian and Saudi officials discussing an extension to the OPEC/non-OPEC output cut agreement, crude oil prices gain traction with the barrel of West Texas Intermediate testing the $48 handle while gaining 1.6% on the day. The commodity-sensitive loonie could continue to find demand in the remainder of the session if the recovery continues.
- WTI firmer, retakes $48.00 and beyond
Later in the session, ISM NY will release its Business Conditions Index for August ahead of July monthly Factory Orders data. Minneapolis Fed President Neel Kashkari and Dallas Fed President Robert Kaplan are also scheduled to deliver speeches in the second half of the NA session.
Technical outlook
The RSI indicator on the daily graph turned south below the 50 handle, suggesting that the short-term bearish momentum is building up. 1.2340 (Sept. 1 low) aligns as the first technical support ahead of 1.2300 (psychological level) and 1.2220 (Jun. 17, 2015, low). On the upside, resistances could be encountered at 1.2465 (10-DMA), 1.2550 (Aug. 29 high) and 1.2590 (50-DMA).
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