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  • USD/CAD is posting strong gains at the start of the week.
  • Falling crude oil prices hurt CAD on Monday.
  • US Dollar Index clings to daily gains near 90.50.

The USD/CAD pair closed the previous week in the negative territory but gained traction on broad USD strength and falling crude oil prices on Monday. As of writing, the pair was trading at its highest level since January 5, gaining 0.77% on a daily basis at 1.2780.

WTI retreats below $52, DXY rises to mid-90.00s

After gaining more than 9% last week, crude oil prices turned south on Monday as the surging number of coronavirus infections globally seems to have revived concerns over a recovery in energy demand. The barrel of West Texas Intermediate (WTI) is currently losing 1.25% on the day, making it difficult for the commodity-related loonie to find demand.

On the other hand, the greenback continues to gather strength against its rivals for the third straight trading day on Monday. The sharp increase witnessed in the US Treasury bond yields after the runoff election in Georgia helped the USD outperform its rivals last week. With the sour market mood providing an additional boost to the buck, the US Dollar Index (DXY) rose to its highest level in more than two weeks at 90.52 on Monday. At the moment, the DXY is up 0.45% on the day at 90.50.

Later in the session, the Bank of Canada will release its Business Outlook Survey. There won’t be any significant macroeconomic data releases featured in the US economic docket but Atlanta Fed President Raphael Bostic and Dallas Federal Reserve President Robert Kaplan will be delivering speeches.

Technical levels to watch for