USD/CAD tops 1.26 as oil prices, stocks, pare gains

• The USD/CAD crossed teh 1.26 level after being capped beneath it earlier in the day.
• A relatively quiet day leaves the focus on other assets
• Oil prices, stocks are up, but below the highs of the day.

The USD/CAD is trading in a narrow range above the 1.26 handle. The top has been 1.2622 and the bottom for the day has been 1.2556. 

The new trading week opened relatively quietly, with many currency pairs trading in relatively limited ranges. The calm opening followed a turbulent Friday that eventually saw stocks closing on a positive note. On Friday, Canada published its all-important jobs report that showed a loss of 88K positions after two months of significant gains, sending the pair higher. 

A more upbeat sentiment greeted traders on Monday and the Canadian dollar initially took advantage of this. USD/CAD dropped to lower ground alongside a rise of oil prices. WTI Crude Oil recaptured the $60 level and stocks opened with significant gains. Later on, the price of oil dropped below the round level and also share prices pared their gains. The slightly less-positive tone pushed the Canadian dollar lower and USD/CAD higher. 

The Canadian calendar is quite sparse during this week, leaving the stage for the sentiment and US events, with the inflation report on Wednesday as the primary event.

USD/CAD levels to watch

The USD/CAD is currently confined to a narrow range between 1.2556, the low of the day, to 1.2630, which capped the pair on Friday. Further above, the swing-high of 1.2682 is the next level of resistance. On the downside, 1.2490 is important to watch.

The RSI on the hourly chart shows that the pair is buying territory and still not in overbought territory. 

The daily chart shows that the pair crossed the 50-day SMA but still trades below the 200-day SMA which stands at 1.2750.