USD/CAD fails to hold above 1.33, stays in the positive territory

USD/CAD loses bullish momentum above 1.33.
US Dollar Index consolidates daily losses near 94.
WTI recovers above $69, erases the bearish opening gap.

Eren Sengezer FXStreet

The USD/CAD pair advanced to a daily high of 1.3315 earlier in the day but failed to preserve its bullish momentum as rising crude oil prices and a weaker greenback started to weigh on the pair. As of writing, the pair was trading at 1.3287, still adding 0.15%, on the day.

The first data from the United States on Monday showed that the National Activity Index released by the Federal Reserve Bank of Chicago dropped to -0.15 in May from 0.42 in April, suggesting a slow down in the economic activity. The US Dollar Index, which rose to 94.37, lost its traction and eased below the 94 mark before retracing a part of its losses. At the moment, the index is at 94.06, down 0.14% on the day.

On the other hand, after recording sharp gains on OPEC's decision on Friday, crude oil prices started the new week on a negative note. However, the barrel of West Texas Intermediate reversed its course and erased its bearish opening gap to turn positive above $69, allowing the commodity-sensitive loonie to stay resilient against the greenback.

Later in the session, new home sales and Dallas Fed Manufacturing Index from the United States will be looked upon for fresh impetus. With sellers remaining in control of the USD's price action, disappointing data could bring another bearish wave.

Technical outlook

The pair could face the first technical support at 1.3260 (Jun. 22 low) before 1.3200 (psychological level/Jun. 19 low) and 1.3160 (Jun. 18 low). On the upside, resistances are located at 1.3315 (daily high), 1.3380 (Jun. 22 high) and 1.3440 (Apr. 5, 2017, high).

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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