USD/CAD struggles to find direction, trades flat on the day below 1.3400
|- USD/CAD is trading in a very tight range on Monday.
- US Dollar Index is pushing lower at the start of the week.
- WTI is gaining more than 1%, trading around mid-$40s.
The USD/CAD pair gained nearly 200 pips last week and seems to have gone into a consolidation phase on Monday. As of writing, the pair was virtually unchanged on a daily basis at 1.3385.
DXY starts erasing last week's impressive gains
The broad-based USD weakness caused the pair to drop to a daily low of 1.3359 during the European trading hours. After gaining 1.7% last week, the US Dollar Index (DXY), which tracks the greenback's performance against a basket of six major currencies, dropped to a daily low of 94.15 on Monday. The upbeat market mood at the start of the week seems to be making it difficult for the safe-haven USD to find demand. At the moment, the DXY is down 0.34% on the day at 94.25.
Meanwhile, rising crude oil prices also helped the CAD gather strength on Monday. The barrel of West Texas Intermediate is currently trading at $40.65, gaining 1.45% on a daily basis.
Nevertheless, USD/CAD's movements remain relatively limited amid a lack of significant macroeconomic data releases.
Later in the session, the Federal Reserve Bank of Dallas will release its Manufacturing Business Index data for September. Next important data from Canada will be Wednesday's monthly Gross Domestic Product (GDP), which is expected to show that the Canadian economy expanded by 3% in July.
Technical levels to watch for
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