USD / CAD declines modestly after climbing to fresh multi-month highs above 1.2800

• USD / CAD is rising sharply at the beginning of the week.
• Risk aversion helps the USD find demand on Monday.
• WTI is down more than 3%, trading around 0.6900.

After closing the second consecutive week in positive territory, the pair USD / CAD it maintained its bullish momentum on Monday and reached its highest level since late January at 1.2805 before entering a consolidation phase. At time of writing, the pair was up 1.1% on the day at 1.2750.

WTI extends fall on Monday

Relentless USD strength and falling crude oil prices fuel the USD / CAD rally at the beginning of the week. With global stock indices suffering heavy losses, the dollar continues to find demand as a safe haven. Reflecting the USD’s upbeat performance, the US Dollar Index is trading at its highest level in more than three months at 92.95, a 0.26% increase on the day.

Meanwhile, Dow Jones and S&P futures were down 1.2% and 1.45%, respectively, suggesting that risk aversion flows are likely to provide an additional boost to the USD in the second half of the day.

On the other hand, crude oil prices are falling amid increased concern about the Delta variant of the coronavirus that damages the recovery of global energy demand. At the moment, a barrel of West Texas Intermediate (WTI) is shedding 3.2% on the day at $ 69.15, weighing on the commodity-sensitive Canadian dollar.

There will be no high-level data releases on the US economic calendar on Monday and the USD market valuation is expected to drive USD / CAD action for the remainder of the day.

Technical levels