USD/CAD recovers toward 1.4000 on broad USD strength
- USD/CAD starts recovering last week's losses on Monday.
- Falling crude oil prices weigh on commodity-sensitive loonie.
- US Dollar Index erases Friday's losses, climbs above 100.
The decisive rebound witnessed in crude oil prices helped the CAD outperform its American part last week. After losing nearly 100 pips, the USD/CAD pair started the new week on firm footing and was last seen gaining 0.42% on the day at 1.3983.
Crude oil rally loses steam
Heightened hopes of the global energy demand recovering faster than expected with major economies easing coronavirus-related restrictions helped crude oil prices gain traction. The barrel of West Texas Intermediate (WTI) last week rose more than 30% to post its largest weekly percentage gain of the year.
However, the cautious market mood on Monday caused the WTI, which was last down 3.5% on the day at $25.20, to go into a consolidation phase.
On the other hand, the uninspiring performance of major European currencies, especially the GBP, and the risk-off atmosphere ramp up the demand for the greenback on Monday. At the moment, the US Dollar Index is up 1.03% on the day at 100.13, allowing the bullish pressure to remain intact.
The US economic docket won't be featuring any significant macroeconomic data releases and the USD's market valuation is likely to continue to impact the pair's movements. On Tuesday, the Consumer Price Index (CPI) data from the US could be the next catalyst.
Technical levels to watch for