USD/CAD pares daily losses below 1.2900 as oil renews intraday low, DXY recovers

• USD/CAD picks up bids to consolidate the first daily losses in three.
• WTI crude oil prices renew intraday low as traders shift attention to USD rebound.
• Inaction in bond markets, statements from EU could have favored sellers previously.
• Second-tier US data, risk catalysts may entertain traders ahead of FOMC.

USD/CAD bears struggle to keep reins as oil prices, Canada’s main export, renew intraday low heading into Tuesday’s European session. Also consolidating the Loonie pair’s recent losses could be the US Dollar Index (DXY) rebound amid sour sentiment.

That said, the WTI crude oil prices drop to the fresh intraday low of $104.65, down 0.30% by the press time. On the contrary, the DXY remains mildly offered around 103.55 versus the early Asian session low of 103.39.

The pair’s early-day losses could be the profit-booking moves around the yearly high as holidays in China and Japan allowed traders to lick their wounds before Wednesday’s Federal Open Market Committee (FOMC). It’s worth noting that the headlines surrounding the European Union’s (EU) readiness to push Russia out of the SWIFT payment system favored the oil prices during the early day and weighed on the USD/CAD.

It should be observed that the market sentiment remains firmer as European indices seem to track Wall Street’s gains and challenge the USD/CAD recovery moves.

Hence, the Loonie pair may witness further weakness should Bank of Canada (BOC) Senior Deputy Governor Carolyn Rogers manage to please CAD bulls. Also important to watch are the US Factory Orders for March, expected at 1.1% versus -0.5% prior.

Technical analysis

Despite the daily fall, USD/CAD remains above a downward sloping trend line from December 2021, around 1.2860 by the press time, which in turn directs buyers toward the 1.3000 threshold, with the late 2021 peak of 1.2966 likely acting as an intermediate halt.