USD/CAD recoils from five-month highs near 1.29 on Canada election, oil recovery

USD/CAD edges lower in the Asian session on Tuesday amid corrective pullback.
Mixed Canadian Federal Election polls, oil recovery influence Loonie’s performance.
US Dollar Index remains strong above 93.00 despite mild correction of late.

The USD/CAD pair trades just below 1.2800 on Tuesday following the previous session’s spectacular  gains. The pair peaked at five-month high near 1.2900 in the overnight session, backed by the greenback’s  strength.

At the time of writing, USD/CAD is trading at 1.2794, down 0.25% for the day.

The major theme for today’s session remains the upcoming Canadian election’s  result, where a clear majority of Justin Trudeau’s  party would bring much needed political stability in the country.

Nevertheless, as per the Canadian network CTV’s decision desk Justin Trudeau’s Liberal Party is winning the election while declaring Trudeau as the next Prime Minister for the third straight term. However it was not clear the party had a minority or majority.

Meanwhile, WTI oil prices locked gains as experts pointed to signs of tightening US oil supplies. ANZ analyst said, global utilities are switching to fuel oil due to rising gas and coal prices. Furthermore, reduced output from the Gulf of Mexico after Hurricane Ada implied lesser supply in near term.

As for now, traders are waiting for Canada’s New Housing Price Index, US Housing Starts, and Building Permits to take fresh trading impetus.

USD/CAD levels to consider