- Crude oil stages a strong rebound on Monday.
- US Dollar Index looks to record its highest daily close of the year.
Despite the broad-based USD strength, the USD/CAD pair struggled to extend its rally on Monday as recovering crude oil prices helped the commodity-sensitive loonie stay resilient against its rivals. As of writing, the pair was virtually unchanged on a daily basis at 1.3205.
Earlier in the day, the dollar gathered momentum as investors continued to stay away from major European currencies. After opening the week modestly higher, the US Dollar Index advanced to its highest level since June of 2017 at 97.58 before retracing a portion of its daily upside. At the moment, the index is up 0.37% on the day at 97.26.
On the other hand, after losing $3 last week, the barrel of West Texas Intermediate started to recover its losses on Monday to help the commodity-related loonie find demand. Reports of Saudi Arabia planning to reduce its oil output to limit crude oil’s losses helped the WTI. As of writing, the barrel of WTI was trading at $61, adding 1.8% on a daily basis. With no macroeconomic data releases in the remainder of the day, the pair’s trading action is likely to remain subdued.
Technical levels to consider
On the upside, the initial resistance for the pair aligns at 1.3225 (Sep. 6 high) ahead of 1.3290 (Jul. 19 high) and 1.3335 (Jun. 21 low). Supports, on the other hand, could be seen at 1.3120 (20-DMA), 1.3045 (100-DMA) and 1.2990 (200-DMA).
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