USD/CAD finds support ahead of 1.24, starts consolidating daily losses
- US Dollar Index starts retracing losses above 90.
- WTI trades in a tight range above $64.
- A choppy trading action is expected in the second half of the day.
At the start of the week, the broad-based greenback weakness continues to dominate the price action in the FX space. After losing more than 60 pips on Friday, the pair pushed lower toward the 1.24 handle before erasing a portion of its daily losses. As of writing, the pair was trading at 1.2437, losing 0.18% on the day.
The US Dollar Index, which closed the previous week at a fresh three-year low, failed to stage a meaningful recovery on Monday amid a lack of fundamental drivers that could allow investors to show interest in the buck. After dropping to 90.05 earlier in the day, the index went into a consolidation phase and was last seen at 90.30, where it was down 0.35% on the day. With American markets closed for the Martin Luther King Day holiday, the subdued trading action of the USD/CAD pair is likely to continue.
On the other hand, crude oil rally is taking a breather on Monday with the barrel of West Texas Intermediate trading in a tight range above the $64 mark, not providing any direction clues for the commodity-sensitive loonie.
Technical outlook
With a decisive break below 1.2405/00 (daily low/psychological level), the pair could extend its losses toward 1.2355 (Jan. 5 low) and 1.2255 (Sep. 22 low). On the upside, resistances align at 1.2500 (psychological level), 1.2545 (20-DMA) and 1.2640 (100-DMA).