USD/CAD drops below 1.3270, recovers on broad USD strength

The USD/CAD pair came under renewed bearish pressure in the last hour and dropped to a fresh five-day low of 1.3264. However, with the Greenback clinging to its recovery gains, the pair reversed its direction and erased its losses. As of writing, the pair was trading at 1.3282, adding 0.04% on a daily basis. 

Oil rises on easing trade tensions

Earlier in the session, rising crude oil prices provided a boost to the commodity-related CAD. After suffering losses on escalating trade tensions on Friday, the barrel of West Texas Intermediate rose all the way up to $55.23 before losing its traction. At the moment, the WTI is still up 0.55% on the day at $54.15.

While speaking at a joint press conference with French President Macron on the final day of the 45th G7 summit in Biarritz, France, US President Donald Trump said he was confident that China was sincere about wanting to make a trade deal with the United States. "Xi is a great leader who can’t lose 3 million jobs or more in a short period of time, that would break down the Chinese system of trade," Trump noted. 

Although Trump's comments lifted crude oil prices higher, it also allowed the Greenback to continue to find demand on the back of rising US Treasury bond yields and helped the pair limit its losses. After erasing nearly 1% last week, the US Dollar Index is now up 0.75% on a daily basis at 98. Meanwhile, the only data from the US showed that new orders for manufactured durable goods orders in July rose 2.1% to beat the market expectation of 1.1% to support the USD's rebound.

Technical levels to watch for