- USD/CAD reversed its direction after slumping to fresh multi-month lows.
- US Dollar Index pared early gains to turn flat above 93.00.
- WTI pulled away from daily tops but continue to trade in the positive territory.
The USD/CAD pair dropped to its lowest level since January at 1.3132 on Monday but staged a decisive rebound during the American trading hours. As of writing, the pair was up 0.2% on a daily basis at 1.3203.
USD gathers strength following a soft start to the week
Earlier in the day, the selling pressure surrounding the greenback helped USD/CAD gain traction. The US Dollar Index (DXY) started the week on a weak note and fell to a daily low of 92.84 during the European session. In the absence of significant macroeconomic data releases, the risk-positive market environment made it difficult for the USD to find demand.
However, the DXY pared its early losses and and turned flat on the day above 93.00. Although the reason behind the USD strength was unlclear, the fact that Wall Street’s main indexes retreated from their opening levels suggests that the risk mood could be softening. At the moment, the index is posting small losses at 93.10.
Meanwhile, after advancing to a daily high of $42.86, the barrel of West Texas Intermediate (WTI) erased a large portion of its gains and made it difficult for the commodity-related CAD to stay resilient against the USD.
On Tuesday, Conference Board’s Consumer Confidence Index and New Home Sales data will be featured in the US economic docket. Later in the day, Bank of Canada (BoC) Deputy Governor Lawrence Schembri is scheduled to deliver a speech.
Technical levels to watch for
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