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  • WTI posts losses below $59 on Monday.
  • Kuwait oil minister says premature to say if output cut will be extended.
  • US Dollar Index stays in the positive territory.

The USD/CAD pair is having a difficult time determining its next short-term direction on Monday as the trading action remains subdued  due to the Memorial Day holiday in the U.S. As of writing, the pair was virtually unchanged on a daily basis at 1.3436.

Crude oil posted heavy losses last week with the barrel of West Texas Intermediate suffering its largest weekly decline of 2019 and didn’t allow the commodity sensitive to capitalize on the USD weakness. After staging a small technical recovery on Friday, the WTI, once again, turned south today and was last seen trading at $58.55, losing 0.75% on a daily basis.

Earlier today, Kuwait’s oil minister, Khaled al-Fadhel, told Reuters that it was still premature to say if OPEC and its allies will decide to extend the supply cut agreement when they meet in June to keep oil prices under pressure.

On the other hand, the lack of market drivers today keeps investors on the sidelines and helps the US Dollar Index remain close to last week’s closing mark.  

Later this week, the Bank of Canada will announce its interest rate decision and publish its monetary policy statement. Previewing the event, “The forward-looking language should be unchanged, with the Bank continuing to focus on household spending, oil markets, and global trade uncertainty,” TD Securities analysts said.

“The apparent deterioration in the trading relationship between the US and China should feature prominently, but the Governor’s constructive comments on the labour market tilt the balance of risks towards a more optimistic statement.”

Technical levels to watch for