USD/CAD drops below 1.2150 as oil continues to push higher
- USD/CAD pair is edging lower in the early American session.
- US Dollar Index continues to move sideways near 90.50.
- Rising crude oil prices help CAD find demand.
After rising to a fresh daily high of 1.2171 on Monday, the USD/CAD pair lost its traction during the American trading hours and was last seen losing 0.15% on the day at 1.2135.
WTI extends rally to fresh multi-year highs
Earlier in the day, the USD's resilience allowed USD/CAD to stay in the positive territory. The US Dollar Index, which gained 0.42% last week, continues to move sideways around 90.50 in the absence of significant fundamental drivers.
However, rising crude oil prices provided a boost to the commodity-related CAD in the second half of the day and forced USD/CAD to turn south. Currently, the barrel of West Texas Intermediate (WTI) is trading at its highest level since October 2018 at $71.70, gaining 1.3% on a daily basis.
Meanwhile, the data from Canada showed that Manufacturing Sales in April contracted by 2.1% on a monthly basis. Although this reading came in worse than the market expectation for a decrease of 1%, it doesn't seem to be having a negative impact on the CAD's market valuation.
On Tuesday, the US Census Bureau will release May Retail Sales data. More importantly, the FOMC will announce its policy decisions and publish the updated Summary of Economic Projections on Wednesday.
Technical levels to watch for