USD/CAD inches lower below 1.31 despite broad USD strength
- US Dollar Index climbed to a fresh session high above 97.30.
- WTI posts small daily losses, trades around mid-57s.
After advancing to 1.3130 on Friday following the employment figures from the United States and Canada, the USD/CAD pair retraced a large portion of its gains ahead of the weekend and started the new week under modest bearish pressure. As of writing, the pair was trading at 1.3067, losing 0.09% on the day.
However, the greenback seems to be preserving its strength with the US Dollar Index posting modest gains at 97.30 and suggests that the pair's losses are likely to stay limited. Additionally, the barrel of West Texas Intermediate is consolidating Friday's gains, losing 0.5% on the day around mid-$57s and making it tough for the commodity-linked loonie to gather momentum.
In the second half of the day, the subdued trading action is likely to continue in the absence of significant macroeconomic data releases.
The next important event for the pair will FOMC Chairman Powell's speech on Tuesday. Although he is supposed to deliver prepared remarks on the effectiveness of stress testing on large banks at an event organized by the Federal Reserve Bank of Boston, investors will be looking for clues regarding the policy outlook. Canadian economic docket will feature housing starts and building permits data tomorrow as well.
Technical levels to watch for