USD/CAD finds support near 1.33, rebounds modestly

• WTI preserves small daily gains above $58.
• Saudi’s Al-Falih says 100% compliance with output cuts will continue at least for 4 months.
• US Dollar Index stays in red below 96.50.

The USD/CAD pair slumped to a daily low near 1.3300 in the early European morning and staged a  recovery in the last couple of hours. As of writing, the pair was trading at 1.3320, losing 0.1% on a daily basis.

The subdued action in the FX markets on Monday doesn’t allow major pairs  to make decisive moves in any direction. Despite some comments from Saudi oil minister Al-Falih in the last hour, crude oil continues to fluctuate in its daily range and doesn’t provide a directional clue to the commodity-sensitive loonie. Khalid Al-Falih told reporters that he was confident about OPEC+ clinging to 100% compliance with the output cut agreement for the next four months. At the moment, the barrel of West Texas Intermediate is up 20 cents on the day at $58.55.

On the other hand, after dropping around 1% last week, the US Dollar Index started the week under a modest bearish pressure as investors refrain from making large bets ahead of this week’s critical FOMC meeting. At the moment, the DXY is losing 0.08% on the day at 96.40.

Previewing the Fed event, “The Fed’s narrative on interest  rates  has been clear since the dovish pivot at the January FOMC meeting: monetary policy is currently in a good place, and the FOMC will remain patient in assessing the need for any further adjustments to the policy stance,” the HSBC analysts said in a recently published article.

Key technical levels