USD/CAD stuck in tight channel below 1.3250

WTI rises above $56 on Monday.
US Dollar Index stays in the negative territory.
Trading action is likely to stay subdued in the second half of the day.

Eren Sengezer FXStreet

The USD/CAD pair came under moderate selling pressure in the early Asian session and broke below the 1.3250 mark. However, with investors staying on the sidelines in the absence of significant macroeconomic data releases on Monday, the pair started to move sideways and is now having a tough time moving out of its tight trading channel. At the moment, the pair is down 0.04% on the day at 1.3235.

Hopes of the U.S. and China moving closer to a trade agreement after this week's talks in Washington continue to support crude oil prices. The barrel of West Texas Intermediate on Monday rose above the $56 mark to reach its highest level since late November at $56.25 and allowed the commodity-related loonie to stay strong against its rivals.

On the other hand, since failing to close the week above the 97 mark, the US Dollar Index extended its technical slide today and was last seen losing 0.2% on the day at 96.73, keeping the pair in the negative territory.

Noth the U.S. and Canadian markets will be closed on Monday and the trading action is likely to remain subdued in the NA session.

Technical levels to consider

1.3200/1.3195 (psychological level/Feb. 13 low) aligns as the first support for the pair ahead of 1.3120 (Jan. 30 low) and 1.3070 (Feb. 1 low). On the upside, resistances could be seen at 1.3250 (daily high), 1.3325 (50-DMA) and 1.3375 (Jan. 24 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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