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  • USD/CAD is gaining more than 100 pips on Monday.
  • US Dollar Index rose to its highest level since August 12.
  • WTI is down more than 4% on the day, trading below $39.

The USD/CAD pair broke above 1.3300 on Monday and touched its highest level in six weeks at 1.3321. With the market action turning subdues in the last hour, the pair seems to have gone into a consolidation phase and was last seen gaining 0.82% on a daily basis at 1.3312.

DXY surges on safe-haven flows

The broad-based USD strength combined with the heavy crude oil selloff on Monday fueled USD/CAD’s rally.

The risk-off market mood amid renewed concerns over the rising number of coronavirus cases impacting the global economic recovery provided a boost to the safe-haven greenback at the start of the week. After Wall Street’s main indexes opened the day deep in the negative territory, the US Dollar Index (DXY) advanced to its highest level since August 12th at 93.78. At the moment, the DXY is up 0.73% on the day at 93.67, looking to post its biggest daily percentage gain since early June.

On the other hand, the dismal energy demand outlook and reports suggesting that Libya is getting ready to restart oil production caused crude oil prices to fall sharply. At the moment, the barrel of West Texas Intermediate (WTI) is down 4.7% on the day at $38.94, not allowing the commodity-sensitive loonie to stage a rebound.

There won’t be any macroeconomic data releases from Canada on Tuesday and investors will be watching FOMC Chairman Jerome Powell’s testimony before the House Financial Services Committee.

Technical levels to watch for