USD/CAD struggles to find direction near 1.2650 as focus shifts to US data
- USD/CAD is moving sideways around mid-1.2600s on Tuesday.
- US Dollar Index holds above 92.50 ahead of inflation data.
- WTI stays in a consolidation phase after climbing to new multi-week highs.
The USD/CAD pair closed the first day of the week in the negative territory as rising crude oil prices provided a boost to the commodity-sensitive CAD. With investors remaining on the sidelines ahead of key inflation data from the US, the pair seems to have gone into a consolidation phase and was last seen trading flat at 12650.
WTI loses bullish momentum on Tuesday
Supported by the OPEC report that showed the global oil demand was forecast to exceed pre-pandemic levels in 2022, the barrel of West Texas Intermediate (WTI) rose more than 1% on Monday. Although the WTI extended its rally to a fresh six-week high of $71.12 on Tuesday, it seems to have gone into a consolidation phase. As of writing, the WTI was clinging to small daily gains at $70.75, limiting USD/CAD’s downside.
On the other hand, the US Dollar Index, which lost its traction amid falling US Treasury bond yields on Monday, is virtually unchanged on the day at 92.60.
The US Bureau of Labor Statistics will release the August Consumer Price Index (CPI) data at 1230 GMT. Investors expect the annual CPI to edge lower to 5.3% from 5.4% in July while seeing the Core CPI inching lower to 4.2% from 4.3%. Stronger-than-expected CPU figures are likely to provide a boost to the greenback and vice versa.
July Manufacturing Sales data will be featured in the Canadian economic docket, which is unlikely to trigger a significant market reaction.
Technical levels to watch for
Text source: MCC.EXCHANGE
