USD/CAD steadies around 1.2550, looks to close third straight day higher
- USD/CAD rose to its highest level since July 28 at 1.2576 on Tuesday.
- WTI trades deep in the negative territory near $70.
- Markit Manufacturing PMI for Canada edged lower to 56.2 in July.
The USD/CAD pair gained traction in the early American session and reached its highest level in five days at 1.2576 before going into a consolidation phase. As of writing, the pair was up 0.35% on a daily basis at 1.2552.
CAD weakens as crude oil prices slide
Falling crude oil prices amid heightened concerns over the coronavirus Delta variant crippling the energy demand recovery weighed heavily on the commodity-sensitive loonie on Tuesday. The barrel of West Texas Intermediate (WTI), which dropped below $70 for the first time in two weeks, was down 1.6% at the time of press at $70.35.
Meanwhile, the data from Canada revealed that the Markit Manufacturing PMI edged lower to 56.2 in July from 56.5 in June.
On the other hand, the USD stays resilient against its major rivals and allows the CAD's market valuation to drive USD/CAD's action. The US Dollar Index is currently fluctuating in a tight range above 92.00 and remains on track to end the day flat.
The US Census Bureau reported on Tuesday that Factory Orders rose by 1.5% on a monthly basis in June, surpassing the market expectation for an increase of 1%. On a negative note, the IBD/TIPP Economic Optimism Index declined to 53.6 in August from 54.3.
On Wednesday, the ADP Employment Change and the ISM Services PMI data from the US will be looked upon for fresh impetus.
Technical levels to watch for