USD/CAD is dragging towards 1.2500 on a weak US dollar index

• USD/CAD retreats to 1.2520 session low, as the US dollar index eases.
• Magnitude 6.5 earthquake hits Canada, no tsunami alert.
• Markets eye BoC Interest Rate Decision on Wednesday.

USD/CAD is trading around the 1.2520 mark, as the US dollar index (DXY) drags lower toward 92.10 at the time of writing.

The US benchmark index S&P 500 futures are up 0.12 at 4,540, while the US 10-year yields are also trading higher at 1.339%.

Rising yields are not helping the US dollar index amidst risk-on sentiment, while Loonie finds a bid tone as WTI price pushes towards the $69.00 mark.

Meanwhile, an earthquake of magnitude 6.5 has struck Canada on Tuesday. There has been no tsunami alert issued or any other losses/damage has been reported.

On the macro side, the US jobs data was a big miss on Friday. The US economy added just over 235,000 jobs in August versus the expected 750,000.

The US dollar index, which measures the strength of the greenback against six majors, slipped to a near four-week low to 91.94 level.

Market participants cheered as fears of an early Fed tapering eased, over concerns on job data, inflation, and worsening Delta variant situation in the US.

Going forward, investors will be taking cues from the Bank of Canada Interest Rate Decision, set to be released on Wednesday.

Technical levels

USD/CAD is trading close to the 1.2520 mark, with initial support at 1.2494, the September 2 low.

 Immediate resistance is at 1.2560, followed by 1.2650, August 31 high.