USD/CAD turns flat on the day near 1.3300 handle
- Trade deficit in Canada rises in November.
- US Dollar Index gains traction on Tuesday, reverses Monday's losses.
- WTI stays in green above $49.
After refreshing its lowest level since the first week of December at 1.3267, the USD/CAD pair reversed its direction and erased all of its daily losses as the greenback preserves its bullish momentum. At the moment, the pair was virtually unchanged on the day at 1.3300.
On Monday, the pair recorded losses for the third straight day as the WTI rose to a fresh-multi week high of $49.77. However, investors seem to be reluctant to increase their long positions unless the WTI makes a decisive break above the critical $50 mark. Ahead of the weekly API data, the barrel of WTI stays in the positive territory above $49 to help the loonie limit its losses against the buck.
Meanwhile, today's data from Canada showed that the international trade deficit rose to $2.1 billion in November as exports contracted by 2.9% amid lower energy prices.
On the other hand, the broad-based selling pressure surrounding European currencies and rising T-bond yields on the back of trade optimism help the dollar outperform its rivals on Tuesday. At the moment, the US Dollar Index is up 0.35% on the day at 96.
The next significant event for the pair will be the BoC's monetary policy announcements on Wednesday. Later in the day, the FOMC will publish the minutes of its December meeting as well.
Technical levels to consider
With a daily close below 1.3300 (psychological level), the pair could extend its losses toward 1.3250 (Dec. 7, 2018, low) ahead of 1.3160 (Dec. 3, 2018, low). On the upside, resistances are located at 1.3310 (daily high), 1.3370 (50-DMA) and 1.3425 (Dec. 11, 2018, high).