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USD/CAD rebounds modestly toward 1.4070 as oil selloff continues

  • WTI extends declines, trades below $14 on Monday.
  • US Dollar Index is posting modest daily losses below 100.
  • Risk-on atmosphere helps CAD stay resilient against USD.

The USD/CAD pair lost its traction at the start of the week and dropped below the 1.4050 area as the upbeat market mood made it difficult for the greenback to find demand. However, with the selling pressure surrounding crude oil prices picking up steam on Monday, the pair seems to have steadied near its daily lows. As of writing, the pair, which recovered to 1.4075 earlier in the hour, was last seen erasing 0.37% on the day at 1.4050.

WTI falls sharply on Monday

Although heightened hopes of major economies reopening with coronavirus infections and fatalities slowing down boost the market sentiment, crude oil struggles to extend its rebound. As of writing, the barrel of West Texas Intermediate was erasing more than 20% on a daily basis at $13.50.

On the other hand, the upbeat market mood as reflected by surging global equity indexes is weighing on the safe-haven greenback and makes it difficult for the pair to stage a decisive rebound. At the moment, the US Dollar Index is down 0.38% on the day at 99.90.

Later in the day, Statistics Canada’s Foreign Portfolio Investment in Canadian Securities will be the only data featured in the economic docket. The next data from the US will be Tuesday’s Goods Trade Balance and Wholesale Inventories. 

Technical levels to watch for

 

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