USDCAD falls again below the 1.3300 level as fresh USD selling emerges

On Tuesday, the USDCAD pair struggles to profit on the previous day's rebound from the 100-day SMA support and encounters new supply near 1.3325. Throughout the early European session, the pair retains its offering tone and is currently located near the daily low, between 1.3285 and 1.3280.

The US Dollar faces renewed selling pressure as expectations for a less aggressive Fed policy tightening rise. In fact, Fed fund futures now price in a 91% likelihood of a 50 basis point rate hike at the December FOMC meeting. Along with a generally upbeat mood on the equities markets, this is viewed as a factor weighing on the safe-haven dollar and exerting some downward pressure on the USDCAD currency pair.

As a result of a moderately negative outlook about crude oil prices, the downside appears to be moderate. An increase of COVID-19 cases in China raises concerns about a decline in fuel usage in the leading crude oil importer in the world. This comes as the Organization of the Petroleum Exporting Countries (OPEC) cut its global demand prediction for 2022 and continues to operate as a headwind for black liquid, which might weaken the commodity-linked Canadian dollar and strengthen the USDCAD pair.

The ambiguous underlying environment necessitates caution on the part of aggressive traders preparing for a firm near-term direction. Traders are currently focusing on the Empire State Manufacturing Index and Producer Price Index from the United States (PPI). Along with influential FOMC member remarks and US bond yields, this will fuel USD demand. In addition, the characteristics of the oil price should provide fresh momentum to the USDCAD pair.