USD/CAD stays below 1.4000 ahead of Poloz speech

• USD/CAD is moving sideways in a narrow band near 1.4000.
• Crude oil is consolidating last week’s gains in quiet day.
• BoC Governor Poloz will deliver a speech on policy outlook at 1730 GMT.

Similar to other major currency pairs, USD/CAD is moving sideways in a tight channel on Monday amid thin trading conditions. As of writing, the pair was down 0.05% on a daily basis at 1.3988.

Crude oil rally takes a break

Last week, rising crude oil prices helped the commodity-sensitive loonie outperform its major rivals. The barrel of West Texas Intermediate (WTI) gained more than 12% on a weekly basis to close around mid-$33s. Although the WTI edged lower during the Asian session on Monday, it recovered the majority of its losses and seems to be staying in a consolidation phase above $33.

Financial markets in the US will be closed in observance of Memorial Day on Monday and the pair is likely to stay quiet ahead of Bank of Canada (BoC) Governor Stephen Poloz’s speech at 1730 GMT. Reflecting the subdued trading action, the US Dollar Index is staying virtually unchanged on the day near 99.80.

Poloz will be delivering a speech entitled “Monetary Policy in Unknowable Time,” which will be followed by a Q&A session. On Tuesday, Poloz and BoC Deputy Governor Carolyn Wilkins will be testifying before parliament at 2100 GMT as well.

Meanwhile, the US economic docket on Tuesday will feature New Home Sales, Conference Board (CB) Consumer Confidence Index and Dallas Fed Manufacturing Business Index data.

Technical levels to watch for