USD/CAD refreshes 10-day high near 1.3100

• The US Dollar Index looks to close the day with small gains above 95.
• WTI steadies around $70 on Monday.
• Later this week, the BoC is scheduled to announce its interest rate decision.

Despite a lack of macroeconomic data releases and holiday-thinned trading volumes, the USD/CAD pair extended its gaily gains and touched its highest level since August 24 at 1.3102. As of writing, the pair was trading at 1.3095, up 0.4% on the day.

A combination of a relatively stronger greenback and an uninspiring crude oil price action seems to be the primary fuel of the pair's rise on Monday. After ending the previous week above the critical 95 mark, the US Dollar Index didn't have a hard time staying in the positive territory in the absence of significant fundamental drivers. As NA traders are enjoying the Labor Day holiday, the US Dollar Index is up 0.05% on the day at 95.15.

On the other hand, regardless of the falling crude oil production in Iran, the OPEC's total daily oil output in August reached its highest level of the year and capped crude oil's gains. The barrel of West Texas Intermediate was last seen trading at $70.08, adding only 20 cents on the day.

The next significant event for the pair will be the BoC's monetary policy meeting on Wednesday. "Our prediction of a 4Q rate hike still stands - coming as soon as October, although contingent on domestic data staying firm. We’ve been confident for some time now that the BoC will follow July’s rate hike with another in the second half of 2018, supported by a summer of high inflation and strong growth, but we don’t expect this to come at the September meeting," ING analysts argued in a recently published report.

Technical levels to consider

The pair could face the initial resistance at 1.3100 (daily high/psychological level) ahead of 1.3165 (Aug. 17 high) and 1.3285 (Jul. 19 high). On the downside, supports are located at 1.3050 (100-DMA), 1.3000 (psychological level) and 1.2960 (Aug. 7 low).