USD/CAD clings to modest daily gains, stays below 1.2400
- USD/CAD stays relatively calm following Monday's sharp drop.
- US Dollar Index reclaims 92.00 ahead of FOMC's Chairman Powell's testimony.
- WTI declines below $73 after climbing to multi-year highs on Monday.
The impressive rally witnessed in crude oil prices and the broad-based USD weakness caused the USD/CAD pair to suffer heavy losses on Monday. After losing nearly 100 pips, however, the pair managed to stage a modest recovery and was last seen losing 0.2% on the day at 1.2385.
WTI retreats following Monday's upsurge
Supported by the improving demand outlook, the barrel of West Texas Intermediate (WTI) reached its highest level since October 2018 at $73.94 on Monday. Ahead of the American Petroleum Institute's (API) weekly crude oil stock report, WTI is losing more than 1% at $72.72, making it difficult for the commodity-sensitive loonie to outperform its rivals.
On the other hand, following last week's impressive rally, the US Dollar Index (DXY) reversed its direction in the absence of significant fundamental drivers and lost 0.5% on the first day of the week. As investors shift their focus to FOMC Chairman Jerome Powell's testimony before the House Select Subcommittee on the Coronavirus Crisis at 1800 GMT, the DXY is posting modest daily gains a little above 92.00.
Meanwhile, May Existing Home Sales and the Federal Reserve Bank of Richmond's Manufacturing Index for June will be featured in the US economic docket later in the session. Nevertheless, these data are not expected to trigger a market reaction.
Technical levels to watch for