USD/CAD struggles near 1.3400 mark amid rising oil prices, modest USD weakness

• USD/CAD meets with some supply on Tuesday and snaps a three-day winning streak.
• Recovering oil prices underpin the Loonie and act as a headwind amid a softer USD.
• Recession fears, hawkish Fed expectations to limit losses for the USD and the major.

The USD/CAD pair comes under some selling pressure on Tuesday and snaps a three-day winning streak to over a two-week high, around the 1.3475 region touched the previous day. The pair maintains its offered tone through the first half of the European session and is currently placed near the daily low, just above the 1.3400 round-figure mark.

Crude oil prices build on the overnight goodish rebound from a nearly two-month low and gain traction for the second straight day amid optimism over a recovery in fuel demand. This, in turn, underpins the commodity-linked Loonie, which, along with a modest US Dollar weakness, exerts downward pressure on the USD/CAD pair. That said, a combination of factors helps limit losses for the major, at least for the time being.

Worries about economic headwinds stemming from the worst yet COVID-19 outbreak in China and rapidly rising borrowing costs might continue to act as a headwind for the black liquid. Apart from this, fresh speculations that the Federal Reserve will stick to its hawkish stance should lend some support to the safe-haven greenback. This, in turn, supports prospects for the emergence of some dip-buying around the USD/CAD pair.

Traders might also refrain from placing aggressive bets ahead of Fed Chair Jerome Powell and Bank of Canada Governor Tiff Macklem's scheduled speeches later during the North American session. Investors will look for fresh cues about the future rate-hike path, which, in turn, could determine the near-term trajectory for the USD/CAD pair. Apart from this, oil price dynamics will be looked upon for some meaningful impetus.

Technical levels to watch