USD/CAD climbs toward 1.32 as WTI slumps below $56
- Crude oil slides on Monday to put loonie under pressure.
- WTI loses more than 1% on the day.
- US Dollar Index struggles to recover last Friday's losses.
After staying calm near mid-1.31s during the first half of the day, the USD/CAD pair started to climb in the last hour and touched a fresh session high of 1.3197 as the commodity-sensitive loonie weakened against its rivals amid falling crude oil prices. At the moment, the pair is up 0.3% on the day at 1.3187.
Although reports of OPEC+ planning to introduce an additional output cut of 1.4 million barrels to counter the negative impact of rising supply on prices helped crude oil stage a modest rebound last week, Russia's cautious approach didn't allow the recovery move to continue. According to Bloomberg, Russia wants to watch the market in coming weeks before deciding whether or not they will comply with cuts. As of writing, the barrel of West Texas Intermediate was trading at $55.95, losing 1.4% on a daily basis.
On the other hand, the US Dollar Index stays in its daily range below 96.50 as investors try to figure out if the Fed is looking to change its policy stance. Last Friday, Fed's Vice Chair and Dallas Fed President both said that they needed to pay attention to the global economic slowdown and its potential impact on the policy outlook. Later in the day, New York Fed President Williams will be delivering a speech and investors will be looking for fresh clues.
Technical levels to consider
With a decisive break above 1.3200 (psychological level/daily high), the pair could target 1.3260 (Nov. 14/Nov. 13 high) and 1.3290 (Jul. 20 high). On the downside, supports could be seen at 1.3145 (daily low), 1.3085 (Nov. 8 low) and 1.3000 (psychological level/200-DMA).