USD / CAD clings to small daily gains around 1.2170

• USD / CAD continues to trade near the monthly high set on Friday.
• Rising oil prices help the CAD limit its losses.
• The US Dollar Index is extending sideways around 90.50.

The pair USD / CAD it reached its highest level since mid-May at 1.2178 on Friday and appears to have entered a consolidation phase on Monday. At the time of writing the pair posted small daily gains and is trading at 1.2168.

Investors await the FOMC meeting

The general strength of the USD thanks to the recovery of US Treasury yields allowed the USD / CAD to gain ground before the weekend. After gaining 0.42% on a weekly basis, the US Dollar Index (DXY) remains lateralized around 90.50 on Monday, as investors remain cautious ahead of key events this week.

On Tuesday, the US Census Bureau will release the retail sales report for May. More importantly, the FOMC will announce its monetary policy decision on Wednesday and publish the updated Economic Forecast Summary, which will provide new clues as to when for a radical change in policy.

On the other hand, crude oil prices continue to rise, helping the commodity-sensitive Canadian dollar to remain resilient against its rivals. At the moment, a barrel of West Texas Intermediate (WTI) is trading at its highest level since October 2018 at $ 71.30, increasing 0.7% on the day.

Canadian Data

Manufacturing sales in Canada declined 2.1% in April from the previous month, data released by Statistics Canada on Monday revealed. This reading was worse than the market expectation of a 1% decrease.

More details in the report revealed that auto-free manufacturing sales rose 1.1%, while new orders fell 2.5%. Finally, unfilled orders were virtually unchanged and the inventory-to-sales ratio was 1.56.

Technical levels