USD/CAD faces barricades around 1.3300 amid subdued USD Index, oil jumps

• USD/CAD has sensed sheer selling pressure around 1.3300 amid strength in the oil price.
• S&P500 is expected to open on a negative note as investors are cautious ahead of second-quarter corporate earnings.
• Although Fed has voted for two more interest rate hikes, the investing community is expecting only one rate hike by the year-end.

The USD/CAD pair has faced stiff barricades near the round-level resistance of 1.3300 in the early New York session. The Loonie asset is expected to remain on the tenterhooks as the market mood has turned risk-off ahead of the United States opening after a holiday.

S&P500 is expected to open on a negative note as investors are cautious ahead of second-quarter corporate earnings. Subdued earnings are expected from US firms amid higher interest rates from the Federal Reserve (Fed) and tight credit conditions by commercial banks. US commercial banks tightened their credit-disbursement process to avoid maintaining asset quality in a turbulent environment.

The US Dollar Index (DXY) has dropped after facing selling pressure around 103.20 despite investors shifting their focus to the release of the Federal Open Market Committee (FOMC) minutes. Although Fed chair Jerome Powell has voted for two more interest rate hikes, the investing community is expecting only one rate hike by the year-end.

About USD Index guidance, economists at MUFG expect Even if the FOMC does hike in July, with the market close to fully priced and with most other G10 central banks priced to hike further, the scope for the Dollar to strengthen over the second half of the year remains limited.

Meanwhile, the Canadian Dollar has picked strength amid upbeat oil prices. West Texas Intermediate (WTI), futures on NYMEX, have climbed to near $72.00 as buying interest inspired by the announcement of production cuts by Saudi are outperforming the bleak global outlook.

It is worth noting that Canada is the leading exporter of oil to the United States and higher oil prices support the Canadian Dollar.