USD/CAD falls toward 1.3220 as WTI rebounds to $59

• WTI retraces its daily drop, turns flat near $59.
• US Dollar Index continues to move sideways above 97.50.
• Building Permits in Canada declined by 1.5% in October.

After spending the majority of the day moving sideways near 1.3250, the USD/CAD pair lost its traction during the American trading hours and slumped to a daily low of 1.3221. As of writing, the pair was trading at 1.3228, down 0.2% on the day.

Crude oil's rebound supports CAD

In the absence of significant macroeconomic drivers on Monday, crude oil's performance seems to be impacting the CAD's market valuation.

The barrel of West Texas Intermediate (WTI), which advanced to its highest level in more than two months near $60 last Friday after OPEC+ decided to deepen the output cut by 500,000 barrels per day, slumped toward the $58 mark during the first half of the day but didn't have a difficult time erasing its losses. As of writing, the WTI was flat on the day at $59.10, helping the commodity-related loonie stay strong against the USD.

Meanwhile, the data published by Statistics Canada on Monday showed that Building Permits in Canada declined by 1.5% on a monthly basis in October to fall short of the market expectation for an increase of 2.9% but was largely ignored by the market participants.

On the other hand, the US Dollar Index is moving sideways near 97.60 following Friday's rebound fueled by the upbeat labour market data as investors are waiting for the Federal Open Market Committee (FOMC) to announce its monetary policy decisions on Wednesday.

Previewing the FOMC event, "FOMC members have made it clear that they think the 'current stance of monetary policy is appropriate' and that they now want to wait sometime and see how things play out before acting again," said Danske Bank analysts. "Focus is likely to be on the updated 'dots' (i.e. policy rate projection)."

Technical levels to watch for

USD/CAD