USD/CAD clings to gains around 1.2800 ahead of PMI data

• USD/CAD is posting small daily gains on Monday.
• US Dollar Index closes in on 91.00 despite upbeat market mood.
• Focus shifts to Manufacturing PMI data from Canada and US.

The USD/CAD pair closed the previous week in the positive territory and edged slightly higher on Monday. As of writing, the pair was up 0.21% on a daily basis at 1.2802.

USD preserves its strength during the European trading hours

The USD’s market valuation seems to be driving USD/CAD’s movements at the start of the week. The US Dollar Index (DXY), which tracks the greenback’s performance against a basket of six major currencies, is currently trading at fresh two-week highs near 90.90, gaining 0.33% on the day.

Although the market mood remains upbeat on renewed hopes of additional fiscal stimulus in the US and easing coronavirus vaccine tensions between the EU and the UK, the greenback doesn’t seem to be having a tough time finding demand. The sharp decline witnessed in the EUR/USD pair is providing a boost to the USD ahead of the American session.

Later in the day, the IHS Markit’s final January Manufacturing PMI figures for the US and Canada will be looked upon for fresh impetus. More importantly, the ISM Manufacturing PMI will be featured in the US economic docket as well. 

Meanwhile, the barrel of West Texas Intermediate (WTI) is posting modest daily gains near $52.50, helping the commodity-sensitive loonie stay resilient against its American counterpart.

Technical levels to watch for