USD/CAD climbs to fresh daily highs above 1.3430 on oil weakness, USD recovery

USD/CAD is trading above 1.3400 on Monday after last week's choppy action.
US Dollar Index rising for the second straight day.
WTI drops below $40 to weigh on commodity-sensitive CAD.

Eren Sengezer FXStreet

The USD/CAD pair closed the previous week little changed above 1.3400 as the commodity-sensitive CAD failed to take advantage of broad-based weakness amid falling crude oil prices. With the greenback gathering strength and crude oil staying under selling pressure, USD/CAD stretched higher on Monday and touched a daily top of 1.3441. As of writing, the pair was up 0.16% on a daily basis at 1.3435.

WTI trades below $40 on Monday

Resurfacing worries over a dismal global energy demand outlook due to a second wave of coronavirus and the reduction in OPEC+ output cuts by 2 million barrels per day from August to December continue to weigh on crude oil prices. At the moment, the barrel of West Texas Intermediate was losing more than 1% on the day at $39.90.

On the other hand, the US Dollar Index (DXY), which staged a decisive rebound on Friday, started the new week on a strong footing. Ahead of the IHS Markit's and the ISM's Manufacturing PMI data for July, the DXY is up 0.32% at 93.75. There won't be any macroeconomic data releases featured in the Canadian economic docket.

A rebound witnessed in the US Treasury bond yields seems to be helping the USD preserve its strength against its major rivals. The 10-year US T-bond yield was last up 2.4% at 0.547%.

Technical levels to watch for

USD/CAD

Overview
Today last price	1.3435
Today Daily Change	0.0023
Today Daily Change %	0.17
Today daily open	1.3412

Trends
Daily SMA20	1.3493
Daily SMA50	1.3555
Daily SMA100	1.3822
Daily SMA200	1.3524

Levels
Previous Daily High	1.344
Previous Daily Low	1.3372
Previous Weekly High	1.346
Previous Weekly Low	1.3331
Previous Monthly High	1.3646
Previous Monthly Low	1.3331
Daily Fibonacci 38.2%	1.3398
Daily Fibonacci 61.8%	1.3414
Daily Pivot Point S1	1.3376
Daily Pivot Point S2	1.334
Daily Pivot Point S3	1.3309
Daily Pivot Point R1	1.3444
Daily Pivot Point R2	1.3476
Daily Pivot Point R3	1.3511

Author

Eren Sengezer

FXStreet

As an economist at heart, Eren Sengezer specializes in the assessment of the short-term and long-term impacts of macroeconomic data, central bank policies and political developments on financial assets.

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