#USDCAD @ 1.31214 comes under fresh selling pressure on Tuesday amid the ongoing USD profit-taking slide. (Pivot Orderbook analysis)

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• USD/CAD comes under fresh selling pressure on Tuesday amid the ongoing USD profit-taking slide.
• A sharp fall in crude oil prices undermines the loonie and helps limit deeper losses for the major.
• Investors now eye US ISM Services PMI for some impetus ahead of the BoC meeting on Wednesday.

The pair currently trades last at 1.31214.

The previous day high was 1.3174 while the previous day low was 1.3127. The daily 38.2% Fib levels comes at 1.3156, expected to provide resistance. Similarly, the daily 61.8% fib level is at 1.3145, expected to provide resistance.

The USD/CAD pair meets with a fresh supply on Tuesday and maintains its offered tone through the first half of the European session. The pair, however, recovers a few pips from the daily low and is currently trading comfortably above the 1.3100 round-figure mark.

A recovery in the global risk sentiment – as depicted by a generally positive tone around the equity markets – drags the safe-haven US dollar away from a two-decade high touched on Monday. This turns out to be a key factor exerting some downward pressure on the USD/CAD pair. That said, a sharp fall in crude oil prices undermines the commodity-linked loonie and offers some support to spot prices.

Oil prices come under renewed selling pressure and drop back closer to a multi-month low touched last week. An OPEC+ deal to cut output by 100,000 barrels per day in October was seen as a symbolic move. This, along with worries that a global economic downturn and COVID-19 curbs in China will dent fuel demand, overshadows concerns over tight global supply and weighs heavily on the black liquid.

Furthermore, rising US Treasury bond yields, bolstered by hawkish Fed expectations, support prospects for the emergence of some USD dip-buying and should limit losses for the USD/CAD pair. Investors seem convinced that the Fed will stick to its aggressive policy tightening path to tame inflation and have been pricing in a greater chance of a supersized 75 bps at the September FOMC policy meeting.

The fundamental backdrop suggests that the path of least resistance for the USD/CAD pair is to the upside and any meaningful slide might still be seen as a buying opportunity. Traders, however, might prefer to move to the sidelines ahead of the Bank of Canada meeting on Wednesday. In the meantime, the US ISM Services PMI might provide some impetus later during the early North American session.

Technical Levels: Supports and Resistances

USDCAD currently trading at 1.3119 at the time of writing. Pair opened at 1.3144 and is trading with a change of -0.19 % .

The pair remains strongly bullish on the daily timeframe. It trades above its 20 SMA @ 1.2971, 50 SMA 1.2937, 100 SMA @ 1.2872 and 200 SMA @ 1.2779.

The previous day high was 1.3174 while the previous day low was 1.3127. The daily 38.2% Fib levels comes at 1.3156, expected to provide resistance. Similarly, the daily 61.8% fib level is at 1.3145, expected to provide resistance.

Note the levels of interest below:

• Pivot support is noted at 1.3123, 1.3101, 1.3076
• Pivot resistance is noted at 1.3169, 1.3195, 1.3216

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