USD/CAD edges lower toward 1.2600 as USD remains on the back foot
- USD/CAD pair is falling for the third straight trading day on Monday.
- US Dollar Index extends correction, stays below 94.00.
- WTI holds near multi-month highs set last week.
After closing the last two trading days of the previous week in the positive territory, the USD/CAD pair continues to push lower on Monday and was last seen losing 0.3% at 1.2608.
DXY drops below 94.00
The ongoing USD weakness seems to be allowing the bearish momentum on USD/CAD to remain intact at the start of the new week. The US Dollar Index (DXY), which reached its highest level in more than a year at 94.50 last Thursday, is falling for the third straight trading day. As of writing, the DXY was down 0.3% at 93.78. However, the absence of fundamental drivers behind the USD selloff on Monday suggests that the current action is a technical correction.
On the other hand, the barrel of West Texas Intermediate (WTI) is posting modest daily gains a little below $76, helping the commodity-related loonie preserve its strength against its major rivals.
Later in the session, August Building Permits will be featured in the Canadian economic docket. August Factory Orders data from the US will be looked upon for fresh impetus as well.
In the meantime, US stock index futures are down between 0.4% and 0.55% ahead of the opening bell, hinting that the risk-averse market environment could help the greenback find demand and limit USD/CAD's downside in the American session.
Technical levels to watch for