• USDCAD comes under some renewed selling pressure on Tuesday amid modest USD weakness.
• Bearish crude oil prices might undermine the Loonie and help limit the downside for the major.
• Investors now look to the US macro data and speeches by FOMC members for a fresh impetus.

The USDCAD pair struggles to capitalize on the previous day's bounce from the 100-day SMA support and meets with a fresh supply near the 1.3325 area on Tuesday. The pair maintains its offered tone through the early European session and is currently placed near the daily low, around the 1.3285-1.3280 region.

The US Dollar comes under some renewed selling pressure amid rising bets for a less aggressive policy tightening by the Fed. In fact, Fed fund futures are now pricing in a 91% chance of a 50 bps rate hike at the next FOMC meeting in December. This, along with a generally positive tone around the equity markets, is seen as another factor weighing on the safe-haven buck and exerting some downward pressure on the USDCAD pair.

The downside, however, seems cushioned in the wake of a mildly negative sentiment surrounding crude oil prices. Rising COVID-19 cases in China raise concerns about lower fuel consumption in the world's top crude oil importer. This comes after OPEC lowered its 2022 global demand forecast and continues to act as a headwind for the black liquid, which might undermine the commodity-linked Loonie and lend support to the USDCAD pair.

The mixed fundamental backdrop warrants some caution for aggressive traders and positioning for a firm near-term direction. Traders now look to the US macro data - the Empire State Manufacturing Index and Producer Price Index (PPI). This, along with speeches by influential FOMC members and the US bond yields, will drive the USD demand. Apart from this, oil price dynamics should provide a fresh impetus to the USDCAD pair.

Technical levels to watch