- US Dollar Index consolidates last week’s gains in 97.70/80 region.
- Crude oil prices face modest bearish pressure on Monday.
- Coming up: Chicago Fed’s National Activity Index and goods trade balance data from the US.
After closing the third straight week in the negative territory last Friday, the USD/CAD pair gained traction and rose to 1.3080 during the European trading hours on Monday but struggled to push higher as this move is seen as a technical correction of last week’s drop rather than a fundamentally-drive advance. As of writing, the pair was virtually unchanged on the day at 1.3057.
Oil rally supported the CAD
Last week, hopes of the OPEC+ opting out for deeper production cuts amid dismal global energy demand outlook and a sharp drop in crude oil stocks in the United States (US) provided a boost to crude oil prices and helped the commodity-related CAD outperform its rivals.
The barrel of West Texas Intermediate (WTI) added 5.5% last week and is now staying in a consolidation phase above the $56 handle.
Meanwhile, ahead of this week’s critical Federal Open Market Committee (FOMC) meeting, the US Dollar Index is staying in a tight range near the 97.70/80 region. Later in the day, the Federal Reserve Bank of Chicago’s National Activity Index, the Federal Reserve Bank of Dallas’ Manufacturing Business Index and the September trade balance data from the US will be looked upon for fresh impetus. The economic calendar won’t be featuring any macroeconomic data releases from Canada on Monday.
Technical levels to watch for
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