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USD/CAD inches higher toward 1.34 despite USD weakness

  • US Dollar Index stays in the negative territory on Monday.
  • Foreign investment in Canadian securities falls in October.
  • WTI stays quiet above $51.

The USD/CAD pair rose to a session high of 1.3401 in the last minutes as the loonie weakened modestly against its rivals following the data release from Canada. As of writing, the pair was trading at 1.3398, adding 0.1% on a daily basis.

According to the monthly report published by Statistics Canada, foreign investment in Canadian securities fell to $4 billion in October from $7.8 billion in September to weigh on the CAD. Furthermore, the barrel of West Texas Intermediate eased from the daily high that it set $51.85 and put some extra weigh on the commodity-sensitive loonie's shoulders. At the moment, the WTI is up 0.3% on the day at $51.30.

On the other hand, the US Dollar Index extended its daily slide in the last hour and limited the pair's gains. After the NY Fed announced that the Empire State Manufacturing Index slumped to 10.9 in December from 23.3 in November, the US Dollar Index fell to a session low of 97.10 and was seen down 0.28% on the day at 97.15.

There won't be any other macroeconomic data releases in the remainder of the day and the pair is unlikely to make a sharp move ahead of Wednesday's Fed meeting and Canadian inflation data.

Technical levels to consider

With a daily close above 1.3400 (daily high/psychological level), the pair could aim for 1.3445 (Dec. 6 high) and 1.3500 (psychological level). On the downside, supports are located at 1.3350 (Dec. 14 low), 1.3290 (Dec. 10 low) and 1.3250 (Dec. 7 low).

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