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USD/CAD fluctuates in narrow band below 1.36 mark

  • USD/CAD continues to trade near its 19-month highs.
  • US Dollar Index moves sideways below 97.
  • WTI treads water above the $45 mark.

Following last weeks impressive rally, which caused the pair to record its highest weekly close since May of 2017, the USD/CAD pair started the week quietly amid the choppy action in the FX markets ahead of the Christmas holiday. As of writing, the pair was trading at 1.3570, down 30 pips, or 0.23%, on a daily basis.

The government shutdown in the U.S. seems to be weighing on the greenback on Monday. Although it's nothing significant, the US Dollar Index, which tracks the greenback against a basket of six currencies, is recording losses in the day ahead of the day's only macroeconomic data release, Chicago Fed's National Activity Index. As of writing, the DXY is down 0.2% on the day at 96.75.

On the other hand, hopes of OPEC+ deepening oil output cuts following the United Arab Emirates’ energy minister's, Suhail al-Mazrouei, comments on Sunday seems to have a provided a small boost to the commodity-sensitive currencies such as the loonie. Nevertheless, the barrel of West Texas Intermediate hasn't yet staged a rebound but doesn't extend its losses either.

  • WTI struggles to preserve gains, stays quiet above $45.

Technical levels to consider

The pair could face the initial resistance at 1.3600 (daily high/2018 high) ahead of 1.3670 (May 18, 2017, high) and 1.3720 (May 15, 2017, high). On the downside, supports align at 1.3500/1.3490 (psychological leve), 1.3445 (Dec. 20 low) and 1.3410 (Dec. 19 low).

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