USD/CAD remains stuck in narrow band below 1.3100
- USD/CAD is struggling to find direction on Tuesday.
- WTI trades with modest losses as focus shifts to OPEC+ meeting.
- US Dollar Index stays under pressure ahead of US data.
After closing the first day of the week deep in the negative territory, the USD/CAD pair seems to have gone into a consolidation phase on Tuesday. As of writing, the pair was up 0.1% on the day at 1.3088.
Crude oil loses traction after Monday's rally
Renewed coronavirus vaccine optimism at the start of the week revived hopes for a steady recovery in global energy demand and helped crude oil prices push higher. The barrel of West Texas Intermediate (WTI) gained more than 3% on Monday and provided a boost to the commodity-related loonie.
On Tuesday, the WTI is trading in the negative territory above $41 as investors are waiting for OPEC+ to announce its decision on extended output cuts after the meeting.
On the other hand, the US Dollar Index (DXY) is extending its slide for the fourth straight day on Tuesday, not allowing the pair to turn north. Ahead of Retail Sales and Industrial Production data from the US, the DXY is down 0.3% on the day at 92.35.
Meanwhile, the S&P 500 futures are down 0.6% on the day, suggesting that Wall Street's main indexes could open in the negative territory. A selloff in US stocks could support the USD in the second half of the day and pave the way for a rebound in USD/CAD.
Technical levels to watch for