USD/CAD moves sideways above 1.2100 after dropping to multi-year lows
- USD/CAD touched its lowest level in more than three years on Monday.
- Rising crude oil prices help CAD preserve its strength.
- US Dollar Index stays within touching distance of 90.00.
After closing the fifth straight week in the negative territory, the USD/CAD pair extended its slide and touched its lowest level since September 2017 at 1.2093 on Monday. However, the pair managed to stage a modest rebound amid a lack of significant fundamental drivers and was last seen losing 0.15% on a daily basis at 1.2112.
Rising crude oil prices support CAD on Monday
On Friday, the data from Canada showed that the Unemployment Rate in April rose to 8.1% from 7.8%. Despite the dismal jobs report, USD/CAD turned south as the USD faced heavy selling pressure after the Nonfarm Payrolls report, which showed the US added only 266K jobs in April vs 978K expected.
The US Dollar Index (DXY), which tracks the greenback's performance against a basket of six major currencies, slumped below 90.00 for the first time since later February on Monday before going into a consolidation phase. At the moment, the DXY is posting small daily losses at 90.13.
In the meantime, the barrel of West Texas Intermediate is rising 1% on a daily basis at $65.50, helping the commodity-related CAD find demand and forcing USD/CAD to stay in the negative territory.
There won't be any significant macroeconomic data releases featured in the US or the Canadian economic docket in the remainder of the day and the pair is likely to extend its sideways grind around 1.2100.
Technical levels to watch for
Author
Eren Sengezer
FXStreet
As an economist at heart, Eren Sengezer specializes in the assessment of the short-term and long-term impacts of macroeconomic data, central bank policies and political developments on financial assets.
