USD/CAD bears poke 1.2850 as oil rises before OPEC meeting, focus on US data, Taiwan

• USD/CAD extends pullback from weekly top to refresh intraday low, snaps two-day uptrend.
• WTI consolidates recent losses ahead of OPEC+ meeting.
• Risk-aversion ebbs on surprise bear of China’s Caixin Services PMI for July.
• US ISM Services PMI, Factory Orders can entertain traders.

USD/CAD takes offers to renew intraday low near 1.2850 ahead of Wednesday’s European session.

The Loonie pair rose during the last two days before reversing from the weekly top of 1.2891. The pullback moves, however, take clues from the recently firmer prices of Canada’s main export item, namely WTI crude oil. Also keeping the USD/CAD prices heavy is the US dollar’s pullback amid cautious optimism ahead of the key US data.

That said, WTI crude oil prices snap a two-day downtrend, up 0.63% intraday near $93.75, amid increasing hops of no major change in the oil producers’ policy during today’s meeting of the Organization of the Petroleum Exporting Countries (OPEC) and allies including Russia, a group known as OPEC+.

Additionally, recently firmer prints of China’s Caixin Services PMI for July appeared to have favored the steel buyers of late. The private services gauge from the dragon nation rose to 55.5 versus 48 expected and 54.5 prior.

Earlier in the day, the US-China tussles over Taiwan joined hawkish Fedspeak to challenge the risk appetite and underpin the USD/CAD run-up.

While portraying the mood, S&P 500 Futures rise 0.25% intraday while the US 10-year Treasury yields drop three basis points (bps) to 2.71% at the latest.

Looking forward, USD/CAD traders should pay attention to the headlines surrounding China, Taiwan and Fed for immediate directions. Also important will be the US Factory Orders for June and ISM Services PMI for July.

Technical analysis

Despite the latest retreat, USD/CAD buyers remain hopeful until witnessing successful trading below the 100-DMA support near 1.2780.