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  • Market sentiment turns positive on Monday to boost crude oil prices.
  • Barrel of WTI adds nearly 2% on the day, trades a little below $56.
  • US Dollar Index preserves last week’s strong gains.

The USD/CAD pair is moving up and down in a tight channel on Monday as the rebound seen in crude oil prices allow the Loonie to stay strong against the USD. As of writing, the pair was down 0.06% on the day at 1.3262.

WTI rises sharply on Monday

Renewed trade optimism following the Trump administration’s decision to delay the ban on Chinese tech firm Huawei to buy supplies from US companies for 90 days helped ease concerns over a dismal energy demand outlook and allowed crude oil prices to stage a decisive recovery. At the moment, the barrel of West Texas Intermediate (WTI) is up 1.95% on the day at $55.85. Moreover, reports of a drone attack on a Saudi oil facility by Yemeni separatists provided an additional boost to crude oil prices.

In the meantime, the 10-year US Treasury bond yield is up nearly 5% on the day to reflect the upbeat market mood. The US Dollar Index, which gauges the greenback’s value against a basket of six major currencies, also took advantage of the rise in T-bond yields and is now posting small daily losses at 98.25, making it difficult for the pair to continue to push lower.

There won’t be any macroeconomic data releases from Canada nor the United States on Monday and crude oil’s price action is likely to continue to impact the pair.

Technical levels to watch for