- USD / CAD is still on track to gain more than 1% on Monday.
- WTI breaks below $ 67, loses more than 7%.
- The US Dollar Index clings to modest gains, holding below 93.00.
The pair USD / CAD It started the new week on a firm footing and rose above 1.2800 for the first time since late January. With trading action turning subdued late in the US session, the pair appears to have entered a consolidation phase and was last seen gaining 1.15% on the day at 1.2755.
The sharp drop in crude oil prices hit the Canadian dollar hard on commodities on Monday. Pressed by worsening demand prospects amid rising cases of coronavirus delta variants and the agreement between Saudi Arabia and the United Arab Emirates to increase oil production, the WTI is down 7.15% to 66.35 $.
On the other hand, the risk-averse market environment is allowing the safe-haven dollar to outperform its rivals. At the moment, the S&P 500 Index is shedding 2.1% on the day at 4.237 and the US Dollar Index is up 0.16% at 92.86.
USD / CAD perspective
Analysts at Credit Suisse believe that USD / CAD could target 1.3024.
“We would see initial resistance at 1.2751 / 64, February highs, then 1.2881, with the potential base size suggesting a move to 1.3024 is possible, the 38.2% retracement of the 2020/2021 dip,” analysts said. . “Short-term support moves to 1.2608, then 1.2577 / 72, with 1.2561 ideally holding to keep immediate risk higher.”