USD/CAD corrects from 4-month tops, slips below 1.3300 mark

• USD/CAD fails to capitalize on the overnight bullish move to four-month tops.
• Rebounding oil prices underpinned the loonie and prompted some profit-taking.
• The corrective slide seemed unaffected by sustained buying around the USD.

The USD/CAD pair continued losing ground through the early European session and is currently placed near the lower end of its daily trading range, just below the 1.3300 round-figure mark.

The pair failed to capitalize on the previous session's goodish intraday positive move to four-month tops and met with some fresh supply on Tuesday. A modest rebound in crude oil prices underpinned demand for the commodity-linked currency – the loonie and turned out to be one of the key factors that prompted some long-unwinding trade.

Traders opt to take some profits off the table

Despite concerns over the economic impact of the deadly coronavirus, the expected new round of economic stimulus measures by China provided a modest boost to the global risk sentiment. This eventually triggered a rally in equity markets and led the recovery in oil prices, now up over 1% for the day.

Meanwhile, the US dollar stood tall near multi-week tops and was further supported by a strong pickup in the US Treasury bond yields. traders, however, seemed unimpressed by sustained USD buying interest, rather preferred to lighten their bullish position ahead of the Fed Chair Jerome Powell's semiannual testimony before the congress.

Technical levels to watch