USD/CAD snaps two-day losing streak amid fresh risk-off, WTI weakness

• USD/CAD bounces off the monthly lows.
• Coronavirus fears keep weighing on the commodity and commodity-linked currencies.
• Canadian Manufacturing Sales, the return of the US traders will be in the focus.

USD/CAD registers 0.12% gains to 1.3250 while heading into the European session on Tuesday. That said, the quote recently snapped the previous two day’s declines while bouncing off the monthly low as fears of coronavirus provided across the board strength to the US dollar.

Following the Caixin report that mentions higher coronavirus infection/death rate among medical workers, receding the pace of the actual numbers of cases from China’s Health Commission lost its importance. On the contrary, reports from China’s Global Times and MNI weighed on the risk-tone.

Earlier, the International Monetary Fund (IMF) and the World Trade Organization (WTO) cited downside risks to the global economy/trade due to the epidemic.

As a result, the US 10-year treasury yields drop four basis points to 1.547% whereas a gauge of Asian stocks also loses more than 1.0% by the press time.

In addition to weighing down the risk-tone, commodities like Crude, Canada’s main export, are also declining amid fears of weak future demand due to the coronavirus contagion.

Moving on, the US traders will return to their desks after the extended weekend and won’t miss responding to the latest coronavirus updates. Also likely to entertain monetary traders will be the US Empire State Manufacturing State Index and Canadian Manufacturing Sales numbers.

Technical Analysis

21-day SMA near 1.3228 offers the immediate support ahead of 200-day SMA, close to 1.3220, while pair’s upside beyond 1.3270 can recall 1.3310 on the charts.