- WTI drops to multi-week lows below $67 on Monday.
- The US Dollar Index looks to close the first day of the week in the red.
- Data from Canada shows a sharp decrease in foreign investment in Canadian securities.
Following a consolidation phase around 1.3150 during the first half of the day, the USD/CAD pair dropped to a fresh session low at 1.3110 and found support there to steady near 1.3130. As of writing, the pair was trading at 1.3132, losing 0.23% on the day.
The pair’s modest fall today seems to be the product of a weaker greenback. After failing to break above the 95 mark on Friday, the US Dollar Index closed the week at 94.50 and the bearish momentum stayed intact amid a lack of fresh catalysts that could wake the bulls up on Monday while the index fell to a daily low at 94.15 in the early NA session. At the moment, the DXY is relatively quiet around 94.30, down 0.15% on the day.
The data from the U.S. showed that retail sales increased by 0.5% in June to match the market expectation while the NY Fed Manufacturing Index eased to 22.6 in July from 25 in June, showing that the business activity in the NY area lost a little bit of momentum.
On the other hand, the pair’s downside seems to be limited with the commodity-sensitive loonie struggling to gather strength with crude oil prices recording sharp losses on Monday. The barrel of West Texas Intermediate lost more than 4% and touched its lowest level in more than three weeks below $67 on Monday as concerns over supply disruptions continued to ease.
Technical outlook
The RSI indicator on the daily chart for the pair stays near 50 handle, suggesting a short-term neutral outlook. On the downside, the initial support aligns at 1.3080 (50-DMA), 1.3000 (psychological level) and 1.2940 (100-DMA). Resistances could be seen at 1.3180 (20-DMA), 1.3265 (Jun. 29 high) and 1.3380 (Jun. 22 high).
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