USD/CAD slides towards 1.3200 ahead of Canada PMI as Oil price recovers, US Dollar struggles

• USD/CAD takes offers to refresh intraday low as European session begins with firmer Oil price.
• Supply crunch fears, US Dollar’s failure to stay firmer keep WTI on the front foot.
• US Dollar Index fades late Monday’s rebound as market sentiment dwindles.
• Bank of Canada Business Outlook Survey, Canada S&P Global Manufacturing PMI for June will be crucial for intraday directions.

USD/CAD slides to 1.3235 as the Loonie pair traders flex muscles to overcome the three-day-old inaction amid the early hours of the European session on Tuesday, after witnessing inactive Asian hours.

The Loonie pair’s latest losses could be linked to an uptick in Canada’s main export item, as well as a retreat in the US Dollar Index (DXY).

That said, WTI crude oil prints mild gains around $70.30 as it justifies the latest announcements from Saudi Arabia and Russia suggesting more supply cuts. Adding strength to the energy benchmark could be the hopes of increasing Oil demand from the US and China as both these economies are trying to overcome differences of late.

On the other hand, the DXY renews its intraday low near 102.90, down 0.07% on a day, as European traders react to the previous day’s downbeat US ISM Manufacturing PMI for June. That said, the private activity gauge dropped to the lowest level in three years, as well as stayed below the 50.0 level for the seventh consecutive month, as it marked a 46.0 figure versus 47.2 expected and 46.9 prior. Further, S&P Global Manufacturing PMI for June confirmed 46.3 figure, the lowest in five months, whereas the Construction Spending improved 0.9% MoM for May, versus 0.5% expected and 0.4% previous readouts.

It should be noted that the US holiday also allows the USD/CAD pair to print losses amid the market’s positioning for the key Canadian data/events. That said, Bank of Canada’s (BoC) Business Outlook Survey and June’s readings of S&P Global Manufacturing PMI appear crucial to watch for clear directions.

Meanwhile, the US Treasury bond yields curve inversion flagged fears of recession and join the anxiety about the Sino-American ties, as US Treasury Secretary Janet Yellen is in Beijing for diplomatic talks, to roil the sentiment and put a floor under the USD/CAD price.

Technical analysis

Multiple Doji candlesticks, portrayed in the last three days, suggest the USD/CAD pair’s inaction within the 21-DMA and 10-DMA, respectively around 1.3260 and 1.3210 in that order.